Buoyed by significant public investment in the 2021-22 national budget, combined with attractive incentives for private developers, Kenya’s affordable housing sector is well positioned to provide attractive opportunities for investors, according to Vivian Ombwayo, Director of research and evaluation at Broll Kenya
“The affordable housing sector in Kenya provides an opportunity for developers to diversify their portfolios, especially those primarily focused on commercial space. This means they are able to diversify into the residential sector, thanks to attractive government incentives,” commented Jess Cleland, COO excluding SA, valuations and Intel at Broll.
Omwayo points out that the abundance housing opportunities in Kenya allow complementary users to be included in affordable housing projects, such as retail, offices, institutions and also medical facilities. This means that at the end of the day, while having to manage their revenues and costs carefully, private developers are able to achieve a healthy return from comprehensive affordable housing projects.
She further explained, “It starts with raising the standard of living for the end users, especially with the Covid-19 pandemic since health is associated with housing. It also increases the employment rate of the country, reduces the crime rate of the community receiving social income from such projects, and facilitates overall community integration. The associated training and development programs are also highly beneficial to local communities. »
Although there is no formal definition of what constitutes affordable housing in the Kenyan property market, according to the Kenya Mortgage Refinance Company Plc (KMRC), the ceiling for a typical three-bedroom unit is four million Kenyan shillings (KES). “However, much depends on the developers themselves, who often base the definition of affordable housing not only on cost, but also on proximity to socio-economic amenities,” noted Omwayo.