Nairobi’s middle class will find it
harder to secure affordable housing in the coming years if the slow
growth of construction caused by rising interest rates and prices of
material is not reversed.
According to the first-ever
annual report on the state of development in Nairobi launched last week
by The Kenya Property Developers Association and HassConsult, the
under-development of housing that fits middle class status and pockets
will become more acute in a few years as this population grows.
While
the middle upper to upper housing markets have a glut, according to
experts, the swelling middle class is already finding it difficult to
locate suitable housing, either for purchase or to rent.
“The
housing shortage in Nairobi is acute; it is deteriorating. The country
projects to build 200,000 housing units every year to match population
growth. But in 2013, just 15,000 housing units were planned in Nairobi,”
according to the report.
It goes on to say that sharp
increases in land rates and county government construction fees have
increased financial disincentives to housing development. For example,
fees for construction permits were raised between 200 times and 1,250
times since the city became a county. Many counties, including Nairobi,
have increased property rates to increase revenue, which could
exacerbate the housing problem.
“Nairobi has declared
its intention to emerge as a world class city, but this depends on
housing construction where current trends are instead slowing down,”
said chief executive officer of Kenya Property Developers Association,
Ms Robyn Emerson.
The report is part of a plan to
increase investor rating on Kenyan real estate. The Jones Lang LeSalle
Global Real Estate Transparency Index, used by investors globally to
assess the safety and appeal of regional real estate investments, rates
Kenya at 67 of 97 countries for the quality of information on its real
estate industry.
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