understanding kenya's housing finance market · pdf fileunderstanding kenya's...

6
Understanding Kenya's Housing Finance Market January 2016 Kenya is Africa's ninth largest economy with its capital city, Nairobi regarded as the business hub and main port of entry into the East and Central African regions. Kenya's economy contributes 42% to the EAC region GDP, with Tanzania and Uganda contributing 50% to the regions GDP collectively. Within the EAC region, Kenya is one of two countries which reduced its share of its population who live below the national poverty line. Kenya has the most advanced and dynamic mortgage industry in the EAC region followed by Tanzania and Uganda. Still, affordability is an issue in Kenya. Kenya's residential property market has been the subject of much media attention in the past years and yet only about 10.2% of urban households can afford the cheapest newly built house in 2015, estimated to cost about US$ 17 000. Still, this percentage is much higher than other countries in the EAC region. This note covers a broad overview of housing and housing finance markets in Kenya. In October 2015, CAHF launched the 6th edition of the Housing Finance in Africa Yearbook , this time covering 48 countries and 5 regions across the continent. The full Kenya profile and the EAC regional profile can be found here . Housing Finance in Africa Yearbook 2015: A Country Overview of Housing Finance Markets in Kenya Kenya’s financial sector is highly developed and is regulated by the Central Bank of Kenya (CBK). Kenya has a dynamic mortgage industry, which is growing rapidly and becoming increasingly competitive. Housing Finance Kenya and KCB have provided 52.8 percent of outstanding mortgage loans by value and 53.3 percent of existing mortgage accounts in 2014. Other major mortgage lenders have contributed 85.5 percent of the value of outstanding mortgage loans by the end of 2014. As of 31 December 2014, the total mortgage book stood at Kshs164 billion (about US$1.8 billion) thus showing a growth of 18.8 percent on the previous year. There were 22 013 mortgage loans in the market by December 2014, an increase from 19 879 in the previous year. Affordability is a major constraint to the growth of the housing and mortgage markets in Kenya and a key challenge in realising access to decent housing. Given an average loan size of Ksh7.5 million (US$82 924), average mortgage interest rate of 15.8 percent, 90 percent loantovalue, and assuming a 25year loan, the monthly repayment would be Ksh100 740.4 (US$1 113.8). 99.9% of Kenyans will not be able to afford this average mortgage loan. Clearly,

Upload: trankhue

Post on 27-Mar-2018

223 views

Category:

Documents


1 download

TRANSCRIPT

Page 1: Understanding Kenya's Housing Finance Market · PDF fileUnderstanding Kenya's Housing Finance Market January 2016 Kenya is Africa's ninth largest economy with its capital city, Nairobi

Understanding Kenyas HousingFinance Market

January 2016

Kenya is Africas ninth largest economy with its capital city Nairobi regarded as the business hub and main port of

entry into the East and Central African regions Kenyas economy contributes 42 to the EAC region GDP with

Tanzania and Uganda contributing 50 to the regions GDP collectively Within the EAC region Kenya is one of two

countries which reduced its share of its population who live below the national poverty line Kenya has the most

advanced and dynamic mortgage industry in the EAC region followed by Tanzania and Uganda Still affordability is

an issue in Kenya Kenyas residential property market has been the subject of much media attention in the past

years and yet only about 102 of urban households can afford the cheapest newly built house in 2015 estimated to

cost about US$ 17 000 Still this percentage is much higher than other countries in the EAC region

This note covers a broad overview of housing and housing finance markets in Kenya In October 2015 CAHF

launched the 6th edition of the Housing Finance in Africa Yearbook this time covering 48 countries and 5 regions

across the continent The full Kenya profile and the EAC regional profile can be found here

Housing Finance in Africa Yearbook 2015 A Country Overview of Housing FinanceMarkets in Kenya

Kenyarsquos financial sector is highly developed and is

regulated by the Central Bank of Kenya (CBK) Kenya

has a dynamic mortgage industry which is growing

rapidly and becoming increasingly competitive

Housing Finance Kenya and KCB have provided 528

percent of outstanding mortgage loans by value and

533 percent of existing mortgage accounts in 2014

Other major mortgage lenders have contributed 855

percent of the value of outstanding mortgage loans by

the end of 2014 As of 31 December 2014 the total

mortgage book stood at Kshs164 billion (about US$18

billion) thus showing a growth of 188 percent on the

previous year There were 22 013 mortgage loans in

the market by December 2014 an increase from 19

879 in the previous year

Affordability is a major constraint to the growth of the housing and mortgage markets in Kenya and a key challenge in

realising access to decent housing Given an average loan size of Ksh75 million (US$82 924) average mortgage

interest rate of 158 percent 90 percent loanshytoshyvalue and assuming a 25shyyear loan the monthly repayment would

be Ksh100 7404 (US$1 1138) 999 of Kenyans will not be able to afford this average mortgage loan Clearly

Kenyas current housing market is not serving its population well

Globally urban populations are growing at a rate much faster than can be absorbed and managed placing a high

demand on services and infrastructure Kenya is no exception with an urbanisation rate of 432 Kenya requires

the construction of at least 132 000 units per annum to cater for new urban dwellers Already the country has a

backlog of 185 million units The demand for housing has shifted to apartments and smaller units often targeted at

the middle and lower income groups

Providing more affordable homes and housing finance in Kenya is not impossible and there are a growing number of

groups who are making strides in this direction taking risks and testing new models For instance on endshyuser

finance products that match cash flows of the middle and low income earners such as home improvement loans

incremental construction financing group loans and jointshyincome loans are being tested

On the supply side developers are shifting to the construction of smaller units (studio oneshybedroom and twoshy

bedroom houses) allowing joint purchase of land to reduce overall cost of completed units and using alternative

building materials For these reasons exciting opportunities exist in the mortgage and housing markets of Kenya

Key Figures Kenya

Inflation has been decreasing inKenya and at the same time theprice of cement fell by almost 14from 2012 to 2015 Unemploymentis high at 92 and almost 46 ofthe population lives below thenational poverty line As aresult affordability for housing islow not assisted by a high averagemortgage interest rate at 16

According to the World Banks DoingBusiness Indicators there are 9procedures to register propertywhich take 72 days and cost 43of the property value The timetaken to register a property is higherthan the other countries in theregion in Tanzania it takes 67 daysKenya has the second highestnumber of procedures to register aproperty in the EAC regionin Uganda there are 11 proceduresIt is also the second highest costafter Tanzania to register a propertyThis means that registeringa property in Kenya is more timeconsuming when compared to othercountries in the region and costsare higher than other countries inthe region

Housing Affordability Kenya

Using CshyGIDD (Canback Global Income Distribution) 2014 income data for Kenya and 2015 CAHF survey input wehave explored housing affordability The following graph suggests the market segments where investors anddevelopers might target their efforts The number of rural and urban households is illustrated per income bracketdefined Additionally the graph provides the national average annual urban household income in 2014 and theaverage annual household income needed to afford the cheapest newly built house by a developer This wascalculated by CAHF and is based on a number of assumptions

The majority of Kenyan households are still rural and concentrated within the lower income brackets demarcated In2015 the cheapest newly built house in Kenya was US$ 17 000 As calculated using key assumptions of mortgageinterest rate (16) bond term (25 years) and downshypayment (20) needed the average annual household incomeneeded for the cheapest newly built house is US$ 8 821 which is higher than the average annual household incomeof US$ 4 140 This means that only 102 of urban households can afford the cheapest newly built house by aformal developer In an attempt to overcome the affordability problem lenders developers borrowers cooperatives and NGOs havecome up with different strategies For instance providing credit products that match cash flows of the poor such asthe home improvement loan (Rafiki MFI and Bank of Africa) and incremental financing (lsquoUjenzi Kwa Hatuarsquo meaningan incremental building loan by Humanity for Habitat) Another creative way to obtain affordable housing involves theuse of joint land purchases by groups of lowshyincome households which makes land affordable and reduces the riskto the lenders A good case to illustrate this is where 2 000 slum dwellers in Nairobi purchased 23 acres of land inMukuru slum Through the help of Akiba Mashinani Trust (AMT) a Kenyan NGO working closely with slum dwellersacross the country they organized themselves into 49 groups of 40 and started saving in 2007 The land waspurchased in 2011 for Ksh81 million (US$953 000) Eventually all 2 000 slum dwellers will have homes there and anadditional 1 000 middle income homes will be built to subsidize the cost

Housing Types Kenya

The Kenyan housing market consists of both urban and rural houses Within urban areas there are low middle and

high income housing

Low income housing as found for example in Kawangware Nairobi are generally nonshypermanent slum type

dwellings at a cost of about US$ 200 and a rental of about US$ 50 per month Households use their own savings tofinance housing Primarily units are built using iron sheets

Middle income housing as found for example in Highrise Nairobi are generally permanent structures costing about

US$ 50 000 or offered at a rental of about US$ 250 per month The financing instrument used to buy a house is a

mortgage Private developers is construction finance

High income housing as found for example in Karen Nairobi are generally permanent structures costing around

US$ 1 000 000 or offered for rentals of about US$ 2 000 per month The financing instrument used for this is a

mortgage or a households own savings and is built with blocks and concrete

Rural housing in Kisii for example costs about US$ 700 to construct using mud and iron sheets It is normally

financed by a households own savings

These housing types provide a broad understanding of the various types of housing in Kenya Images were provided

by local consultant Allan Kundu The data presented is by no means exhaustive and is merely presented as an

indication of housing in the country Data was collected from in country consultants Feel free to contact us with any

updated information

The CAHF website collects news updates Filter by country or theme Some recent articles available for Kenya

include

Only Ministry of Lands can issue title deeds not National Land Commission rules Supreme Court

Lack of supply of affordable housing continuesPlanning concerns and urban developmentReview of proposed amendments to the Sectional properties Act 1987 and proposed Shared CommunitiesAct 2014

In 2015 CAHF commissioned a HOFINET survey on the Kenyan housing finance market The results of the survey

which includes general macroshyeconomic data and data on housing finance systems and housing policy can be

found here

A forthcoming project commissioned by CAHF in 2015 seeks to understand and track housing costs across Africa

The aim is to explore the cost of a basic entryshylevel house across different countries in Africa and to understand

what drives cost differences Kenya is one of 16 countries that are being investigated Once the research is

complete it will available on CAHFs website For more information please contact David Gardner

Useful websites

fsdkenyaorg shy Financial Sector Development Kenya focuses on the development of financial inclusion inKenya The work undertaken to reach this goal ranges from direct investment into market innovations toresearch and policy analysis httpwwwafricaneconomicoutlookorgencountryshynoteseastshyafricakenya shy The African Economic Outlook(AEO) presents the current state of economic and social development in Kenya and projects the outlook forthe coming two yearswwwcentralbankgoke shy The Kenyan Central Bank publishes mortgage data in its annual report eachDecember httpwwwmixmarketorgmficountryKenya shy is a data hub where microfinance institutions (MFIs) andsupporting organizations share institutional data to broaden transparency and market insighthttpwwwworldbankorgencountrykenya shy provides data and research on a country basis wwwdoingbusinessorg shy the doing business indicators is a World Bank publication on quantitativeindicators on business regulations and the protection of property rights that can be compared across 189economies over time wwwkbacoke shy the Kenyan Banking Association includes Kenyas mortgage lending banks wwwshelterafriqueorg shy is a panshyAfrican finance institution that supports the development of the housingand real estate sector in Africa The products and services offered to support the efficient delivery ofaffordable housing and commercial real estate include but are not limited to project finance institutionallending social housing etc

Other news

CAHF is offering internships to current students Applications for the opportunities

close 29 January 2016 Click here for more information

Take a look at the latest issue of the African Union for

Housing Finances newsletter featuring an overview of the AUHF Conference

latest news and information about housing finance events across

The AUHF is looking to a employ a Coordinator Deadline for applications for the

position is 22 January 2016 Click here for information about the position

We have issued terms of references for HOFINET surveys to be conducted

in Cote dIvoire Mozambique Namibia and Senegal If you or another

consultancy are based in these countries and have the capacity to perform

the surveys click on the links above Africa

Copyright copy 2016 Centre for Affordable Housing Finance in Africa All rights reserved

follow on Twitter | like on Facebook | follow in LinkedIn

visit our website | sign up to our mailing list

Our mailing address isCentre for Affordable Housing Finance in Africa

PO Box 72624Parkview Gauteng South Africa 2122

add us to your address book | unsubscribe | update subscription preferences

Other resources

Page 2: Understanding Kenya's Housing Finance Market · PDF fileUnderstanding Kenya's Housing Finance Market January 2016 Kenya is Africa's ninth largest economy with its capital city, Nairobi

Kenyas current housing market is not serving its population well

Globally urban populations are growing at a rate much faster than can be absorbed and managed placing a high

demand on services and infrastructure Kenya is no exception with an urbanisation rate of 432 Kenya requires

the construction of at least 132 000 units per annum to cater for new urban dwellers Already the country has a

backlog of 185 million units The demand for housing has shifted to apartments and smaller units often targeted at

the middle and lower income groups

Providing more affordable homes and housing finance in Kenya is not impossible and there are a growing number of

groups who are making strides in this direction taking risks and testing new models For instance on endshyuser

finance products that match cash flows of the middle and low income earners such as home improvement loans

incremental construction financing group loans and jointshyincome loans are being tested

On the supply side developers are shifting to the construction of smaller units (studio oneshybedroom and twoshy

bedroom houses) allowing joint purchase of land to reduce overall cost of completed units and using alternative

building materials For these reasons exciting opportunities exist in the mortgage and housing markets of Kenya

Key Figures Kenya

Inflation has been decreasing inKenya and at the same time theprice of cement fell by almost 14from 2012 to 2015 Unemploymentis high at 92 and almost 46 ofthe population lives below thenational poverty line As aresult affordability for housing islow not assisted by a high averagemortgage interest rate at 16

According to the World Banks DoingBusiness Indicators there are 9procedures to register propertywhich take 72 days and cost 43of the property value The timetaken to register a property is higherthan the other countries in theregion in Tanzania it takes 67 daysKenya has the second highestnumber of procedures to register aproperty in the EAC regionin Uganda there are 11 proceduresIt is also the second highest costafter Tanzania to register a propertyThis means that registeringa property in Kenya is more timeconsuming when compared to othercountries in the region and costsare higher than other countries inthe region

Housing Affordability Kenya

Using CshyGIDD (Canback Global Income Distribution) 2014 income data for Kenya and 2015 CAHF survey input wehave explored housing affordability The following graph suggests the market segments where investors anddevelopers might target their efforts The number of rural and urban households is illustrated per income bracketdefined Additionally the graph provides the national average annual urban household income in 2014 and theaverage annual household income needed to afford the cheapest newly built house by a developer This wascalculated by CAHF and is based on a number of assumptions

The majority of Kenyan households are still rural and concentrated within the lower income brackets demarcated In2015 the cheapest newly built house in Kenya was US$ 17 000 As calculated using key assumptions of mortgageinterest rate (16) bond term (25 years) and downshypayment (20) needed the average annual household incomeneeded for the cheapest newly built house is US$ 8 821 which is higher than the average annual household incomeof US$ 4 140 This means that only 102 of urban households can afford the cheapest newly built house by aformal developer In an attempt to overcome the affordability problem lenders developers borrowers cooperatives and NGOs havecome up with different strategies For instance providing credit products that match cash flows of the poor such asthe home improvement loan (Rafiki MFI and Bank of Africa) and incremental financing (lsquoUjenzi Kwa Hatuarsquo meaningan incremental building loan by Humanity for Habitat) Another creative way to obtain affordable housing involves theuse of joint land purchases by groups of lowshyincome households which makes land affordable and reduces the riskto the lenders A good case to illustrate this is where 2 000 slum dwellers in Nairobi purchased 23 acres of land inMukuru slum Through the help of Akiba Mashinani Trust (AMT) a Kenyan NGO working closely with slum dwellersacross the country they organized themselves into 49 groups of 40 and started saving in 2007 The land waspurchased in 2011 for Ksh81 million (US$953 000) Eventually all 2 000 slum dwellers will have homes there and anadditional 1 000 middle income homes will be built to subsidize the cost

Housing Types Kenya

The Kenyan housing market consists of both urban and rural houses Within urban areas there are low middle and

high income housing

Low income housing as found for example in Kawangware Nairobi are generally nonshypermanent slum type

dwellings at a cost of about US$ 200 and a rental of about US$ 50 per month Households use their own savings tofinance housing Primarily units are built using iron sheets

Middle income housing as found for example in Highrise Nairobi are generally permanent structures costing about

US$ 50 000 or offered at a rental of about US$ 250 per month The financing instrument used to buy a house is a

mortgage Private developers is construction finance

High income housing as found for example in Karen Nairobi are generally permanent structures costing around

US$ 1 000 000 or offered for rentals of about US$ 2 000 per month The financing instrument used for this is a

mortgage or a households own savings and is built with blocks and concrete

Rural housing in Kisii for example costs about US$ 700 to construct using mud and iron sheets It is normally

financed by a households own savings

These housing types provide a broad understanding of the various types of housing in Kenya Images were provided

by local consultant Allan Kundu The data presented is by no means exhaustive and is merely presented as an

indication of housing in the country Data was collected from in country consultants Feel free to contact us with any

updated information

The CAHF website collects news updates Filter by country or theme Some recent articles available for Kenya

include

Only Ministry of Lands can issue title deeds not National Land Commission rules Supreme Court

Lack of supply of affordable housing continuesPlanning concerns and urban developmentReview of proposed amendments to the Sectional properties Act 1987 and proposed Shared CommunitiesAct 2014

In 2015 CAHF commissioned a HOFINET survey on the Kenyan housing finance market The results of the survey

which includes general macroshyeconomic data and data on housing finance systems and housing policy can be

found here

A forthcoming project commissioned by CAHF in 2015 seeks to understand and track housing costs across Africa

The aim is to explore the cost of a basic entryshylevel house across different countries in Africa and to understand

what drives cost differences Kenya is one of 16 countries that are being investigated Once the research is

complete it will available on CAHFs website For more information please contact David Gardner

Useful websites

fsdkenyaorg shy Financial Sector Development Kenya focuses on the development of financial inclusion inKenya The work undertaken to reach this goal ranges from direct investment into market innovations toresearch and policy analysis httpwwwafricaneconomicoutlookorgencountryshynoteseastshyafricakenya shy The African Economic Outlook(AEO) presents the current state of economic and social development in Kenya and projects the outlook forthe coming two yearswwwcentralbankgoke shy The Kenyan Central Bank publishes mortgage data in its annual report eachDecember httpwwwmixmarketorgmficountryKenya shy is a data hub where microfinance institutions (MFIs) andsupporting organizations share institutional data to broaden transparency and market insighthttpwwwworldbankorgencountrykenya shy provides data and research on a country basis wwwdoingbusinessorg shy the doing business indicators is a World Bank publication on quantitativeindicators on business regulations and the protection of property rights that can be compared across 189economies over time wwwkbacoke shy the Kenyan Banking Association includes Kenyas mortgage lending banks wwwshelterafriqueorg shy is a panshyAfrican finance institution that supports the development of the housingand real estate sector in Africa The products and services offered to support the efficient delivery ofaffordable housing and commercial real estate include but are not limited to project finance institutionallending social housing etc

Other news

CAHF is offering internships to current students Applications for the opportunities

close 29 January 2016 Click here for more information

Take a look at the latest issue of the African Union for

Housing Finances newsletter featuring an overview of the AUHF Conference

latest news and information about housing finance events across

The AUHF is looking to a employ a Coordinator Deadline for applications for the

position is 22 January 2016 Click here for information about the position

We have issued terms of references for HOFINET surveys to be conducted

in Cote dIvoire Mozambique Namibia and Senegal If you or another

consultancy are based in these countries and have the capacity to perform

the surveys click on the links above Africa

Copyright copy 2016 Centre for Affordable Housing Finance in Africa All rights reserved

follow on Twitter | like on Facebook | follow in LinkedIn

visit our website | sign up to our mailing list

Our mailing address isCentre for Affordable Housing Finance in Africa

PO Box 72624Parkview Gauteng South Africa 2122

add us to your address book | unsubscribe | update subscription preferences

Other resources

Page 3: Understanding Kenya's Housing Finance Market · PDF fileUnderstanding Kenya's Housing Finance Market January 2016 Kenya is Africa's ninth largest economy with its capital city, Nairobi

Housing Affordability Kenya

Using CshyGIDD (Canback Global Income Distribution) 2014 income data for Kenya and 2015 CAHF survey input wehave explored housing affordability The following graph suggests the market segments where investors anddevelopers might target their efforts The number of rural and urban households is illustrated per income bracketdefined Additionally the graph provides the national average annual urban household income in 2014 and theaverage annual household income needed to afford the cheapest newly built house by a developer This wascalculated by CAHF and is based on a number of assumptions

The majority of Kenyan households are still rural and concentrated within the lower income brackets demarcated In2015 the cheapest newly built house in Kenya was US$ 17 000 As calculated using key assumptions of mortgageinterest rate (16) bond term (25 years) and downshypayment (20) needed the average annual household incomeneeded for the cheapest newly built house is US$ 8 821 which is higher than the average annual household incomeof US$ 4 140 This means that only 102 of urban households can afford the cheapest newly built house by aformal developer In an attempt to overcome the affordability problem lenders developers borrowers cooperatives and NGOs havecome up with different strategies For instance providing credit products that match cash flows of the poor such asthe home improvement loan (Rafiki MFI and Bank of Africa) and incremental financing (lsquoUjenzi Kwa Hatuarsquo meaningan incremental building loan by Humanity for Habitat) Another creative way to obtain affordable housing involves theuse of joint land purchases by groups of lowshyincome households which makes land affordable and reduces the riskto the lenders A good case to illustrate this is where 2 000 slum dwellers in Nairobi purchased 23 acres of land inMukuru slum Through the help of Akiba Mashinani Trust (AMT) a Kenyan NGO working closely with slum dwellersacross the country they organized themselves into 49 groups of 40 and started saving in 2007 The land waspurchased in 2011 for Ksh81 million (US$953 000) Eventually all 2 000 slum dwellers will have homes there and anadditional 1 000 middle income homes will be built to subsidize the cost

Housing Types Kenya

The Kenyan housing market consists of both urban and rural houses Within urban areas there are low middle and

high income housing

Low income housing as found for example in Kawangware Nairobi are generally nonshypermanent slum type

dwellings at a cost of about US$ 200 and a rental of about US$ 50 per month Households use their own savings tofinance housing Primarily units are built using iron sheets

Middle income housing as found for example in Highrise Nairobi are generally permanent structures costing about

US$ 50 000 or offered at a rental of about US$ 250 per month The financing instrument used to buy a house is a

mortgage Private developers is construction finance

High income housing as found for example in Karen Nairobi are generally permanent structures costing around

US$ 1 000 000 or offered for rentals of about US$ 2 000 per month The financing instrument used for this is a

mortgage or a households own savings and is built with blocks and concrete

Rural housing in Kisii for example costs about US$ 700 to construct using mud and iron sheets It is normally

financed by a households own savings

These housing types provide a broad understanding of the various types of housing in Kenya Images were provided

by local consultant Allan Kundu The data presented is by no means exhaustive and is merely presented as an

indication of housing in the country Data was collected from in country consultants Feel free to contact us with any

updated information

The CAHF website collects news updates Filter by country or theme Some recent articles available for Kenya

include

Only Ministry of Lands can issue title deeds not National Land Commission rules Supreme Court

Lack of supply of affordable housing continuesPlanning concerns and urban developmentReview of proposed amendments to the Sectional properties Act 1987 and proposed Shared CommunitiesAct 2014

In 2015 CAHF commissioned a HOFINET survey on the Kenyan housing finance market The results of the survey

which includes general macroshyeconomic data and data on housing finance systems and housing policy can be

found here

A forthcoming project commissioned by CAHF in 2015 seeks to understand and track housing costs across Africa

The aim is to explore the cost of a basic entryshylevel house across different countries in Africa and to understand

what drives cost differences Kenya is one of 16 countries that are being investigated Once the research is

complete it will available on CAHFs website For more information please contact David Gardner

Useful websites

fsdkenyaorg shy Financial Sector Development Kenya focuses on the development of financial inclusion inKenya The work undertaken to reach this goal ranges from direct investment into market innovations toresearch and policy analysis httpwwwafricaneconomicoutlookorgencountryshynoteseastshyafricakenya shy The African Economic Outlook(AEO) presents the current state of economic and social development in Kenya and projects the outlook forthe coming two yearswwwcentralbankgoke shy The Kenyan Central Bank publishes mortgage data in its annual report eachDecember httpwwwmixmarketorgmficountryKenya shy is a data hub where microfinance institutions (MFIs) andsupporting organizations share institutional data to broaden transparency and market insighthttpwwwworldbankorgencountrykenya shy provides data and research on a country basis wwwdoingbusinessorg shy the doing business indicators is a World Bank publication on quantitativeindicators on business regulations and the protection of property rights that can be compared across 189economies over time wwwkbacoke shy the Kenyan Banking Association includes Kenyas mortgage lending banks wwwshelterafriqueorg shy is a panshyAfrican finance institution that supports the development of the housingand real estate sector in Africa The products and services offered to support the efficient delivery ofaffordable housing and commercial real estate include but are not limited to project finance institutionallending social housing etc

Other news

CAHF is offering internships to current students Applications for the opportunities

close 29 January 2016 Click here for more information

Take a look at the latest issue of the African Union for

Housing Finances newsletter featuring an overview of the AUHF Conference

latest news and information about housing finance events across

The AUHF is looking to a employ a Coordinator Deadline for applications for the

position is 22 January 2016 Click here for information about the position

We have issued terms of references for HOFINET surveys to be conducted

in Cote dIvoire Mozambique Namibia and Senegal If you or another

consultancy are based in these countries and have the capacity to perform

the surveys click on the links above Africa

Copyright copy 2016 Centre for Affordable Housing Finance in Africa All rights reserved

follow on Twitter | like on Facebook | follow in LinkedIn

visit our website | sign up to our mailing list

Our mailing address isCentre for Affordable Housing Finance in Africa

PO Box 72624Parkview Gauteng South Africa 2122

add us to your address book | unsubscribe | update subscription preferences

Other resources

Page 4: Understanding Kenya's Housing Finance Market · PDF fileUnderstanding Kenya's Housing Finance Market January 2016 Kenya is Africa's ninth largest economy with its capital city, Nairobi

dwellings at a cost of about US$ 200 and a rental of about US$ 50 per month Households use their own savings tofinance housing Primarily units are built using iron sheets

Middle income housing as found for example in Highrise Nairobi are generally permanent structures costing about

US$ 50 000 or offered at a rental of about US$ 250 per month The financing instrument used to buy a house is a

mortgage Private developers is construction finance

High income housing as found for example in Karen Nairobi are generally permanent structures costing around

US$ 1 000 000 or offered for rentals of about US$ 2 000 per month The financing instrument used for this is a

mortgage or a households own savings and is built with blocks and concrete

Rural housing in Kisii for example costs about US$ 700 to construct using mud and iron sheets It is normally

financed by a households own savings

These housing types provide a broad understanding of the various types of housing in Kenya Images were provided

by local consultant Allan Kundu The data presented is by no means exhaustive and is merely presented as an

indication of housing in the country Data was collected from in country consultants Feel free to contact us with any

updated information

The CAHF website collects news updates Filter by country or theme Some recent articles available for Kenya

include

Only Ministry of Lands can issue title deeds not National Land Commission rules Supreme Court

Lack of supply of affordable housing continuesPlanning concerns and urban developmentReview of proposed amendments to the Sectional properties Act 1987 and proposed Shared CommunitiesAct 2014

In 2015 CAHF commissioned a HOFINET survey on the Kenyan housing finance market The results of the survey

which includes general macroshyeconomic data and data on housing finance systems and housing policy can be

found here

A forthcoming project commissioned by CAHF in 2015 seeks to understand and track housing costs across Africa

The aim is to explore the cost of a basic entryshylevel house across different countries in Africa and to understand

what drives cost differences Kenya is one of 16 countries that are being investigated Once the research is

complete it will available on CAHFs website For more information please contact David Gardner

Useful websites

fsdkenyaorg shy Financial Sector Development Kenya focuses on the development of financial inclusion inKenya The work undertaken to reach this goal ranges from direct investment into market innovations toresearch and policy analysis httpwwwafricaneconomicoutlookorgencountryshynoteseastshyafricakenya shy The African Economic Outlook(AEO) presents the current state of economic and social development in Kenya and projects the outlook forthe coming two yearswwwcentralbankgoke shy The Kenyan Central Bank publishes mortgage data in its annual report eachDecember httpwwwmixmarketorgmficountryKenya shy is a data hub where microfinance institutions (MFIs) andsupporting organizations share institutional data to broaden transparency and market insighthttpwwwworldbankorgencountrykenya shy provides data and research on a country basis wwwdoingbusinessorg shy the doing business indicators is a World Bank publication on quantitativeindicators on business regulations and the protection of property rights that can be compared across 189economies over time wwwkbacoke shy the Kenyan Banking Association includes Kenyas mortgage lending banks wwwshelterafriqueorg shy is a panshyAfrican finance institution that supports the development of the housingand real estate sector in Africa The products and services offered to support the efficient delivery ofaffordable housing and commercial real estate include but are not limited to project finance institutionallending social housing etc

Other news

CAHF is offering internships to current students Applications for the opportunities

close 29 January 2016 Click here for more information

Take a look at the latest issue of the African Union for

Housing Finances newsletter featuring an overview of the AUHF Conference

latest news and information about housing finance events across

The AUHF is looking to a employ a Coordinator Deadline for applications for the

position is 22 January 2016 Click here for information about the position

We have issued terms of references for HOFINET surveys to be conducted

in Cote dIvoire Mozambique Namibia and Senegal If you or another

consultancy are based in these countries and have the capacity to perform

the surveys click on the links above Africa

Copyright copy 2016 Centre for Affordable Housing Finance in Africa All rights reserved

follow on Twitter | like on Facebook | follow in LinkedIn

visit our website | sign up to our mailing list

Our mailing address isCentre for Affordable Housing Finance in Africa

PO Box 72624Parkview Gauteng South Africa 2122

add us to your address book | unsubscribe | update subscription preferences

Other resources

Page 5: Understanding Kenya's Housing Finance Market · PDF fileUnderstanding Kenya's Housing Finance Market January 2016 Kenya is Africa's ninth largest economy with its capital city, Nairobi

Lack of supply of affordable housing continuesPlanning concerns and urban developmentReview of proposed amendments to the Sectional properties Act 1987 and proposed Shared CommunitiesAct 2014

In 2015 CAHF commissioned a HOFINET survey on the Kenyan housing finance market The results of the survey

which includes general macroshyeconomic data and data on housing finance systems and housing policy can be

found here

A forthcoming project commissioned by CAHF in 2015 seeks to understand and track housing costs across Africa

The aim is to explore the cost of a basic entryshylevel house across different countries in Africa and to understand

what drives cost differences Kenya is one of 16 countries that are being investigated Once the research is

complete it will available on CAHFs website For more information please contact David Gardner

Useful websites

fsdkenyaorg shy Financial Sector Development Kenya focuses on the development of financial inclusion inKenya The work undertaken to reach this goal ranges from direct investment into market innovations toresearch and policy analysis httpwwwafricaneconomicoutlookorgencountryshynoteseastshyafricakenya shy The African Economic Outlook(AEO) presents the current state of economic and social development in Kenya and projects the outlook forthe coming two yearswwwcentralbankgoke shy The Kenyan Central Bank publishes mortgage data in its annual report eachDecember httpwwwmixmarketorgmficountryKenya shy is a data hub where microfinance institutions (MFIs) andsupporting organizations share institutional data to broaden transparency and market insighthttpwwwworldbankorgencountrykenya shy provides data and research on a country basis wwwdoingbusinessorg shy the doing business indicators is a World Bank publication on quantitativeindicators on business regulations and the protection of property rights that can be compared across 189economies over time wwwkbacoke shy the Kenyan Banking Association includes Kenyas mortgage lending banks wwwshelterafriqueorg shy is a panshyAfrican finance institution that supports the development of the housingand real estate sector in Africa The products and services offered to support the efficient delivery ofaffordable housing and commercial real estate include but are not limited to project finance institutionallending social housing etc

Other news

CAHF is offering internships to current students Applications for the opportunities

close 29 January 2016 Click here for more information

Take a look at the latest issue of the African Union for

Housing Finances newsletter featuring an overview of the AUHF Conference

latest news and information about housing finance events across

The AUHF is looking to a employ a Coordinator Deadline for applications for the

position is 22 January 2016 Click here for information about the position

We have issued terms of references for HOFINET surveys to be conducted

in Cote dIvoire Mozambique Namibia and Senegal If you or another

consultancy are based in these countries and have the capacity to perform

the surveys click on the links above Africa

Copyright copy 2016 Centre for Affordable Housing Finance in Africa All rights reserved

follow on Twitter | like on Facebook | follow in LinkedIn

visit our website | sign up to our mailing list

Our mailing address isCentre for Affordable Housing Finance in Africa

PO Box 72624Parkview Gauteng South Africa 2122

add us to your address book | unsubscribe | update subscription preferences

Other resources

Page 6: Understanding Kenya's Housing Finance Market · PDF fileUnderstanding Kenya's Housing Finance Market January 2016 Kenya is Africa's ninth largest economy with its capital city, Nairobi

We have issued terms of references for HOFINET surveys to be conducted

in Cote dIvoire Mozambique Namibia and Senegal If you or another

consultancy are based in these countries and have the capacity to perform

the surveys click on the links above Africa

Copyright copy 2016 Centre for Affordable Housing Finance in Africa All rights reserved

follow on Twitter | like on Facebook | follow in LinkedIn

visit our website | sign up to our mailing list

Our mailing address isCentre for Affordable Housing Finance in Africa

PO Box 72624Parkview Gauteng South Africa 2122

add us to your address book | unsubscribe | update subscription preferences

Other resources