High-end homes glut hits Nairobi property market

A low cost housing boom is gathering pace in the country as property developers and financiers begin to shift their focus to this market segment, which was previously seen as unprofitable.

Following a glut in the high-end segment, investors are increasingly launching budget housing projects that target low income earners as they seek to meet the rising demand for affordable homes.

Kenya Projects is one such investor, having committed Sh4 billion to the construction of budget homes in Nairobi and Mombasa to cater for low and lower-middle income earners.

The developer targets to build some 1,000 two-bedroom houses with lesser luxury fittings on parcels of land acquired cheaply.

Kenya Projects has already built and sold 200 houses in Mombasa’s Mtwapa and Bamburi areas and it expects to complete 100 houses in Ruiru, Kiambu County, by end of the year.

The houses are selling for between Sh1.5 million and Sh2.5 million depending on the design.

The firm’s chief executive David Kanyi was recently quoted by local media as saying that the model has been successful and that 60 per cent of the houses had been purchased off-plan.

Kenya Projects has joined a growing list of companies that are eyeing the low-cost housing market, among them HF Group, KCB Group and Shelter Afrique and Urbanis Africa.

HF, through its Makao housing project, has been offering helping land owners to put up low cost homes whose cost start from Sh1.6 million – a figure that is affordable for a sizeable number of Kenyans.

On its part, KCB has unveiled its construction arm – Property Centre- whose main task will be construction of 10,000 houses in various parts of the country in the next three years.

The bank hopes to use modern construction technologies to build houses priced at between Sh1 million and Sh3 million.

Urbanis Africa, through Jamii Bora Makao, has put up several low cost housing projects in the Kisaju area on the outskirts of Nairobi, while Pan-African housing financier Shelter Afrique is partnering with land owners across the country to build houses for Kenya’s low income earners.

Shelter Afrique last year broke ground on several housing projects countrywide that will add at least 1,000 low cost homes into the market. Some of the units, according to the lender, will be sold to the public for about Sh1.6 million.

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