Kenya housing sector upbeat

The demand for housing in Kenya outstrips the supply

01/03/2010 – The widely anticipated Kenyan housing bubble may not happen any time soon as demand for houses among the middle income earners continues to escalate.

The demand, according to property analysts, is so huge that it far outstrips the supply.

Aware of this trend mortgage companies have been on a conscious drive to expand their product range to cater for this new emerging market.

CFC Stanbic Bank, for example, announced recently an enhanced CFC Stanbic Bank’s home loan product that will see the introduction of Equity Release, which allows customers to unlock the value of their home by borrowing money against their property.

CFC Stanbic Bank has also introduced access mortgage, where customers make lump sum deposits into their home loan account with no additional cost and can withdraw funds at any time.

Billy Lynch, Director of personal and business banking said, “We previously only provided home loans for amounts over Sh5 million but we have now lowered this to Sh3 million.” Mr Lynch added that the bank had lowered its interest rates from 17% to a negotiable rate of between 15.25 and 15.75%.

The bank is expected to launch vacant land financing, pension backed lending and off plan financing in the next three months. This, according to Mr Lynch, will make the bank’s loan products more attractive. CFC Stanbic Bank finances 50 mortgages a month.

Financial analysts have recently pegged the property market as one of the drivers towards economic recovery in 2010.