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    Nairobi’s Central Land Registry Set to go Live on ArdhiSasa

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    Asante EPZ Limited Fined For Illegal Merger By CAK

    Mobile phone subscribers decline by over 200,000 – CA Data

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    Johan ICT Kenya launched to offer data protection for firms

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    Türkey ambassador promotes bi-lateral trade with Kenya

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    Police boss with checkered history breathes his last

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    Nairobi County Offices Switched off Over Ballooning Power Bills

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  • Markets
    Emirates Takes Triple Gold For The Third Year In a Row For Safety

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    IBL Group acquires Amethis stake in Naivas International

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    Revealed: The number of Kenyans with over Sh100 million in their account

    The raging debate on Twitter over the lack of US dollar in Kenya and the downplaying of the issue by the Central Bank of Kenya

    Agricultural subsidies unfair – Kenya tells WTO

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    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

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    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

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    Jambojet and Cellulant Partner on Loyalty Customer Rewards

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    Gov’t to Give Sh100, 000 for Someone Who Will Name This Building

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  • Real Estate
    National Construction Authority Suspends Licences of 18 Contractors

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    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

    NEMA Re-Introduces Another Tax for Developers

    NEMA Re-Introduces Another Tax for Developers

    Centum Digitalizes Real Estate Sector

    Centum Digitalizes Real Estate Sector

    Superior Homes Launches Reward Program for Investors

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    Report: High Demand for Luxury Houses in Nairobi Fueling  Increase in Prices

    Report: High Demand for Luxury Houses in Nairobi Fueling Increase in Prices

    Regional property summit kicks off in Nairobi

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    Five Reasons Why Real Estate Increases in Value

    Five Reasons Why Real Estate Increases in Value

    Optiven Foundation Launches TVET Sponsorship Program

    Optiven Foundation Launches TVET Sponsorship Program

  • Tech
    Tecno Kenya Announces Launch Of Camon 19 Series & Spark 9 Series

    Tecno Kenya Announces Launch Of Camon 19 Series & Spark 9 Series

    Nairobi Women to start offering online outpatient services

    mTek Secures Sh340m to Accelerate Paperless Insurance in Kenya

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    This is the New Way to Share Your Data Bundles , Minutes, Voice and SMSs

    Merchants Challenged to Integrate Payment Gateways to Prevent Online Payment Fraud

    Merchants Challenged to Integrate Payment Gateways to Prevent Online Payment Fraud

    Samsung Introduces Its 2022 Lineup of Appliances to Dealers

    Fathers Day Deals: Samsung Honors Fathers With Great Discounts

    Samsung Showcases its Premium Consumer Electronics Range

    Samsung Showcases its Premium Consumer Electronics Range

    OPPO Launches its Flagship Device Find X5 in Kenya to Retail for Sh100,000

    OPPO Launches its Flagship Device Find X5 in Kenya to Retail for Sh100,000

    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

    Why the LG TONE Free HBS-FN6 Wireless Earbuds are a Must Have

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  • World Business
    Why Mercedes Benz is Recalling Their Old Models

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    EA Sports End 29 Years of Video Game Partnership With FIFA

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    Netflix Stock Collapses After Losing 200,000 Subscribers

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    President Uhuru Urges International Community to Lift Sanctions on Zimbabwe

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    Johan ICT Kenya launched to offer data protection for firms

    Johan ICT Kenya launched to offer data protection for firms

    Winfall For Tea Farmers as Bonus Set to Increase

    Winfall For Tea Farmers as Bonus Set to Increase

    St John Ambulance Seeking Sh12 million to Train Bodaboda Operators

    St John Ambulance Seeking Sh12 million to Train Bodaboda Operators

    Samsung Introduces Its 2022 Lineup of Appliances to Dealers

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    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

    Kenya set to host first ever transport awards

    Kenya set to host first ever transport awards

    Zamara Feted as the Overall Best Insurance Broker of the Year

    Zamara Feted as the Overall Best Insurance Broker of the Year

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    Peter Kioko Named National Bank of Kenya Acting Managing Director

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    • Banking
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Kenyan Business Feed
  • Home
  • News
    Nairobi’s Central Land Registry Set to go Live on ArdhiSasa

    Nairobi’s Central Land Registry Set to go Live on ArdhiSasa

    Asante EPZ Limited Fined For Illegal Merger By CAK

    Mobile phone subscribers decline by over 200,000 – CA Data

    Drunk Driving Will Now Cost You Sh100,000 Fine, As Alco-blow Returns

    Drunk Driving Will Now Cost You Sh100,000 Fine, As Alco-blow Returns

    IBL Group acquires Amethis stake in Naivas International

    IBL Group acquires Amethis stake in Naivas International

    High Court Orders Shut Down of All Sports Streaming Websites

    High Court Orders Shut Down of All Sports Streaming Websites

    Johan ICT Kenya launched to offer data protection for firms

    Johan ICT Kenya launched to offer data protection for firms

    Türkey ambassador promotes bi-lateral trade with Kenya

    Türkey ambassador promotes bi-lateral trade with Kenya

    Police boss with checkered history breathes his last

    Police boss with checkered history breathes his last

    Nairobi County Offices Switched off Over Ballooning Power Bills

    Nairobi County Offices Switched off Over Ballooning Power Bills

  • Markets
    Emirates Takes Triple Gold For The Third Year In a Row For Safety

    Emirates Takes Triple Gold For The Third Year In a Row For Safety

    IBL Group acquires Amethis stake in Naivas International

    IBL Group acquires Amethis stake in Naivas International

    Revealed: The number of Kenyans with over Sh100 million in their account

    The raging debate on Twitter over the lack of US dollar in Kenya and the downplaying of the issue by the Central Bank of Kenya

    Agricultural subsidies unfair – Kenya tells WTO

    Agricultural subsidies unfair – Kenya tells WTO

    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

    Bad News for Kenyans As Fuel Prices Increase By Sh 9

    Bad News for Kenyans As Fuel Prices Increase By Sh 9

    Jambojet and Cellulant Partner on Loyalty Customer Rewards

    Jambojet and Cellulant Partner on Loyalty Customer Rewards

    Gov’t to Give Sh100, 000 for Someone Who Will Name This Building

    Gov’t to Give Sh100, 000 for Someone Who Will Name This Building

  • Real Estate
    National Construction Authority Suspends Licences of 18 Contractors

    National Construction Authority Suspends Licences of 18 Contractors

    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

    NEMA Re-Introduces Another Tax for Developers

    NEMA Re-Introduces Another Tax for Developers

    Centum Digitalizes Real Estate Sector

    Centum Digitalizes Real Estate Sector

    Superior Homes Launches Reward Program for Investors

    Superior Homes Launches Reward Program for Investors

    Report: High Demand for Luxury Houses in Nairobi Fueling  Increase in Prices

    Report: High Demand for Luxury Houses in Nairobi Fueling Increase in Prices

    Regional property summit kicks off in Nairobi

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    Five Reasons Why Real Estate Increases in Value

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    Optiven Foundation Launches TVET Sponsorship Program

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  • Tech
    Tecno Kenya Announces Launch Of Camon 19 Series & Spark 9 Series

    Tecno Kenya Announces Launch Of Camon 19 Series & Spark 9 Series

    Nairobi Women to start offering online outpatient services

    mTek Secures Sh340m to Accelerate Paperless Insurance in Kenya

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    This is the New Way to Share Your Data Bundles , Minutes, Voice and SMSs

    Merchants Challenged to Integrate Payment Gateways to Prevent Online Payment Fraud

    Merchants Challenged to Integrate Payment Gateways to Prevent Online Payment Fraud

    Samsung Introduces Its 2022 Lineup of Appliances to Dealers

    Fathers Day Deals: Samsung Honors Fathers With Great Discounts

    Samsung Showcases its Premium Consumer Electronics Range

    Samsung Showcases its Premium Consumer Electronics Range

    OPPO Launches its Flagship Device Find X5 in Kenya to Retail for Sh100,000

    OPPO Launches its Flagship Device Find X5 in Kenya to Retail for Sh100,000

    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

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    Why the LG TONE Free HBS-FN6 Wireless Earbuds are a Must Have

  • World Business
    Why Mercedes Benz is Recalling Their Old Models

    Why Mercedes Benz is Recalling Their Old Models

    Cold comfort awaits a springtime Davos

    Cold comfort awaits a springtime Davos

    Meet The Richest Man Who Can Fund Kenya’s Budget Alone for 10years

    Meet The Richest Man Who Can Fund Kenya’s Budget Alone for 10years

    EA Sports End 29 Years of Video Game Partnership With FIFA

    EA Sports End 29 Years of Video Game Partnership With FIFA

    Central African Republic Adopts Bitcoin as an Official Currency

    Central African Republic Adopts Bitcoin as an Official Currency

    Netflix Stock Collapses After Losing 200,000 Subscribers

    Netflix Stock Collapses After Losing 200,000 Subscribers

    Putin spokesman refuses to rule out use of nuclear weapons if Russia faced an ‘existential threat’

    Putin spokesman refuses to rule out use of nuclear weapons if Russia faced an ‘existential threat’

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    How new regulations are shaking up the world’s fastest sport

    President Uhuru Urges International Community to Lift Sanctions on Zimbabwe

    President Uhuru Urges International Community to Lift Sanctions on Zimbabwe

  • KBF
    • All
    • Agribusiness
    • Banking
    • Insurance
    • Manufacturing
    • Opinion
    Johan ICT Kenya launched to offer data protection for firms

    Johan ICT Kenya launched to offer data protection for firms

    Winfall For Tea Farmers as Bonus Set to Increase

    Winfall For Tea Farmers as Bonus Set to Increase

    St John Ambulance Seeking Sh12 million to Train Bodaboda Operators

    St John Ambulance Seeking Sh12 million to Train Bodaboda Operators

    Samsung Introduces Its 2022 Lineup of Appliances to Dealers

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    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

    Kenya set to host first ever transport awards

    Kenya set to host first ever transport awards

    Zamara Feted as the Overall Best Insurance Broker of the Year

    Zamara Feted as the Overall Best Insurance Broker of the Year

    Jambojet and Cellulant Partner on Loyalty Customer Rewards

    Jambojet and Cellulant Partner on Loyalty Customer Rewards

    Peter Kioko Named National Bank of Kenya Acting Managing Director

    Peter Kioko Named National Bank of Kenya Acting Managing Director

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      Procedure for funding your Metropolitan National Sacco account through MPESA

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      KCB Group Shareholders Approve Sh9.64B in Dividend Payout

      KCB Group Shareholders Approve Sh9.64B in Dividend Payout

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      DIB Bank Opens Its 6th Branch

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      KCB Sustainability Efforts Win Global Award

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    • Insurance
      Zamara Feted as the Overall Best Insurance Broker of the Year

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Home Real Estate

Developers eye cheap houses as real-estate fortunes dip

by Kenyan Business Feed
September 4, 2019
in Real Estate
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A gated estate in Nairobi.

The affordable housing initiative will result in more private real estate developers shifting from targeting high-end buyers to housing the low-and middle-income market segments, experts have said.

Under the Affordable Housing pillar of the Big Four agenda, the government plans to build 500,000 housing units by 2022. 

According Cytonn Real Estate Ltd research analyst Jennifer Kendi, incentives from the government towards affordable housing such as the formation of the Kenya Mortgage Refinancing Company, exemption from stamp duty first-time home buyers and 15 per cent corporate tax rate relief for developers who provide at least 100 low-cost housing units per year, will result in more developers moving into the segment.

Kendi says oversupply in the high-end residential sector has resulted in performance slowdown forcing developers to look for options beyond the high-end market segment. 

“The high-end residential sector has recorded a slowdown in performance recording a two per cent decline in occupancy rates and a 2.4 per cent decline in uptake due to the oversupply in the segment. Therefore, the government’s affordable housing initiative to develop 500,000 units by 2022, will redirect developers to the low-and middle-income segments,” says Kendi.

However, Knight Frank managing director Ben Woodhams says the initiative may not have much impact on private real estate developers because they target a different clientele. 

“Not many developers are in affordable housing because it has low profit margins. It is difficult to make money in that market segment unless you partner with the government,” says Woodhams. 

Small-scale developers in affordable housing could be headed for tougher times due to increased competition.

Erdemann Properties Ltd head of communication Joseph Baraza says small-scale private developers in affordable housing need to partner with the government or risk being kicked out of the business.  

“If they do not partner with the government, they will find it very hard to make profits with the increasing competition. Large developers serving the high-end market must also find ways to get into the lower-income segment to survive the current tough times in the sector,” says Baraza. 

Profit margins in housing the low-and middle-income segments are unattractive. 

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To attract more developers into the segment, Kendi suggests the government provide incentives such as availing public land for affordable housing projects, facilitate land swaps to make suitable land available for development and guarantee the uptake of the houses by the public. 

The government could also provide tax incentives such as exempting construction materials and supplies for use in the affordable housing projects from paying Value Added Tax. 

The real estate sector in Kenya is facing several challenges, the main one being inadequate and high costs of funds to both developers and off-takers.

“Real estate development is capital-intensive and debt has become increasingly costly in the recent past. Thus, developers have to explore alternative sources of capital,” says Kendi, adding that the actual cost of credit averages 18 per cent per annum due to additional administration fees. 

Worse still, the capping of interest on bank loans has resulted in less credit being availed to the real estate sector. 

“The rate caps made it more difficult for developers to access credit,” says Woodhams.

Baraza, however, says developers carrying out large projects were less affected by the caps because they can negotiate better rates.

“If you are handling projects as large as we are, then you can negotiate for favourable rates with your bank,” she says.

Edermann, in partnership with the government is building 3,000 affordable houses in Ngara, Nairobi, a project dubbed River Bank Apartments.

Funding long-term real estate projects is a risky affair with data from Central Bank showing that non-performing loans in the sector rose by 48 per cent to hit Sh44.4 billion by the end of 2018. 

To surmount the challenge of accessing affordable credit, Kendi advises developers to explore alternative real estate financing options such as development Real Estate Investment Trusts (Reits) and real estate asset-backed securities. 


Kenyan Business Feed is the top Kenyan Business Blog. We share news from Kenya and across the region. To contact us with any alert, please email us to [email protected]

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