tcpak-ward-2016On 10th, November, 2016, we were fated ” For the great contribution towards Sustainable Development, Planning,

Investments and Entrepreneurship” by  ‘ TOWN AND COUNTY PLANNERS ASSOCIATION OF KENYA’.

Most sincere appreciations extends to our NACHU family which includes the Membership, the management, staff and the board for having played a significant role in the realization of this success. Live long NACHU Family.

NACHU Members Become Involved in Urban Agriculture

From January 19th to February 3rd, five NACHU members participated in an International Exchange with youth representatives from Toronto, Canada and Cape Town, South Africa. This exchange was based on urban agriculture techniques and the participation of youth in creating solutions to food insecurity.

Including visits to farms and agriculture plots in both Nakuru and Nairobi, the youth had an opportunity to share their experiences and challenges. Issues such as land tenure insecurity, the changing climate and creating farmers networks were discussed. NACHU’s partners Mazingira Institute (Nairobi) and Rooftops Canada (Toronto) organized the exchange.

Food has often been insecure in Kenya as well as throughout East Africa due to poor food policies and extreme weather challenges. Rising prices have put many Kenyans at risk of being unable to feed their families. Urban agriculture can be a solution to these problems. Techniques for farming in small plots, or in sacks to avoid soil contamination, allow even urban dwellers to take the matter of food security into their own hands. Furthermore, by promoting urban agriculture, other development areas improve. It can create notable increases in employment, youth empowerment, health and nutrition, community development, entrepreneurial skills, environmental protection and establishing a network of urban farmers.

The exchange was an important learning experience for all involved and a reminder of the interdependence between food security and housing in Kenya. To learn more about Mazingira’s programs with Nairobi urban farmers, visit their website: Read more about the exchange from Rooftops Canada here.

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What you should know about Kenya’s property market in 2013

HassConsult, a Kenyan real estate firm, releases the quarterly Hass Property Index, a research tool that gives investors, home owners and the financial industry information about house price inflation. Farhana Hassanali–Hashmani, property development manager at HassConsult, tells How we made it in Africa’s Dinfin Mulupi about Kenya’s minuscule mortgage market, Nairobi’s high prices and whether there is a bubble.
Hass Consult says that even though property prices in Nairobi are high, they are on par with other parts of Africa.

How did the market perform last year and what are your projections for 2013?

Last year wasn’t the best for the industry, but I wouldn’t say it was the worst either. Overall we saw that prices began to mature and as one of the indicators of the housing market, we can say that although it didn’t go down, the prices were a bit stagnant. The key thing to note is that last year the volume of activity reduced quite substantially. A lot of this was pegged to the fact that previous activity had been very much spurred by the mortgage market, and because of the rise in interest rates a lot of the mortgage buyers couldn’t access affordable mortgages and therefore put on hold their buying decisions. As a result, the volume of sales was not so good last year, although rentals picked up because most people opted to rent instead of buy.

As is typical with any election cycle in Kenya, there has been a tendency for buyers and other investors to put on hold decisions until the aftermath. We are looking at a quiet first quarter and then depending on the outcome of the elections, hopefully things will pick up. In this quarter, there are a few spots of opportunity for investors who are willing to invest because some sellers are keeping their prices at a reasonable level. Because some developers put on hold projects last year, we expect to see climbing of prices again towards the end of the year, since units that should have been ready, will not be.

There are concerns that property prices in Nairobi are exorbitant and unsustainable. What are your thoughts?

They are too high if you look at them in isolation. But if you compare prices in Nairobi with property prices in South Africa they are at par and even higher in Tanzania. This is very typical of big cities. The prices are often expensive and a little bit more affordable as you go outside the city.

Is there a bubble or not?

I always say a bubble is associated very much with markets where the demand is artificial. Speculation is triggered very much by too easy availability of mortgages and that is not the case in Kenya. The mortgage penetration rate in Kenya is very low. Most buyers pay cash while just a handful go for the mortgage option. If money is easily available you can create artificial demand. This is what happened in Dubai where a lot of speculation led to the bubble burst, such that completed projects remain unoccupied. In Kenya, the demand for property is very high with a very small population owning their own homes while the rest are tenants. Nairobi’s population is growing very fast so I don’t think there is a bubble. There may be some areas of oversupply, where rentals take a little bit longer or landlords have to bring down their rent. This happens mostly in the upper-end of the market.

The upper-end of the market is saturated, while demand in the lower and middle class segments is unmet. Why?

The middle and lower income segments of the market are very much pegged to the interest rates. Developers in those markets have to borrow, meaning activities slow down when interest rates go up. In the upper market, the off-plan model allows developers to use the buyers’ money to build, thus developers find it easier in that market. The margins in the lower and middle income segments are also tight. Developers therefore have to be creative to make profits. They have to look for cheap land that requires as little as possible additional infrastructural expenses. These segments, however, have big volumes and potential for a lot of profits.

We are seeing new low-cost projects targeting women and youth. How are they performing?

This is being driven by the exposure and the sophistication of the market and the increased number of working women who are financially independent. These are buyers that were not being catered for before. The US$12,000 houses are now stretching the pyramid. There is demand for this among women and investment groups that are quite common in Kenya. This will help broaden the market.

Kenya has just over 20,000 mortgage accounts. Why is this the case, even though the middle class is growing?

Well, the mortgages are too expensive. If you buy a property and rent it at return of 6% to 8% and you are paying your mortgage at an interest of 18%, the math doesn’t add up. I think mortgages are just not accessible to most people. There is also an element of fear.

What opportunities are there in the Kenyan market for investors?

The returns in Kenya’s property market are good. It is usually about 25% to 30% on development and up to 8% on rentals, but the capital growth is good. It has always been a very solid investment. It has been a very well performing market. This is not yet a mature market and any time you have a growing market you have opportunities. I think that given the experience of the last election foreign investors will shy away for the moment and wait for the outcome. There are many foreign investors in the market though, and many are coming. We are seeing institutional investors pumping billions in real estate projects. In the past, institutional investors shied away from real estate because it has its characteristics; it is not very liquid and it requires huge amounts of investment. Now they are seeing that real estate is outperforming other markets and it is secure. With the development of the real estate investment trusts (REITs), we expect a lot more institutional investors. Real estate is capital intensive and we think REITs will bridge that gap.

Describe some of the hurdles facing the industry

Financing is a huge challenge, both from the perspective of the developer and the buyer. For developers, the cost of land is very high and almost prohibitive. Developers have to invest in infrastructure to make their projects viable. It is becoming more and more difficult to deliver a good value project simply because the costs are very high. There is also red tape in getting approvals but those are things developers can deal with. The costs are what I would say are prohibitive.

What are the trends to watch out for?

We are seeing more high-rise and mixed-use developments as well as comprehensive schemes that are more lifestyle based, both outside the city and within. The middle class has blossomed in the last decade and that is the market that is driving a lot of these aspirational properties. The golf and gated estates outside the city will start developing into little suburbs and satellite cities, easing pressure on Nairobi.

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Affordable Housing Gaining Grounds In Kenya

Economic policies if implemented to the letter and are free from minimum consequences of corruption and political interference can transform a country to a state of economic vibrancy; wide spread sound infrastructure and responsible political governance.
Vision 2030 is founded on three pillars; economic pillar, social pillar and political pillar. In its Social pillar, the Government is to plan for adequate and affordable housing for its citizens.
The blue print guides policy implementers and stakeholders to aim at producing houses to all income earners at the rate of 150,000 units annually. Read more