A one-bedroom apartment priced between Ksh1 million and Ksh1.5 million in Ngara/ Pangani area was rated among the cheapest houses to purchase in Kenya, according to the latest report by the Centre for Affordable Housing in Africa (CAHF).
The report titled Housing Finance in Africa: A review of Africa's housing finance markets, published data on the cheapest newly built houses by the private sector in each country across the continent.
In Kenya, the cheapest house was a 30 square metres apartment which is part of the Park Road development sold through the government's Boma Yangu platform located in Ngara, Nairobi County.
The report pegged the rent at the one-bedroom apartments at around Ksh25,000 monthly, exclusive of service charges.
The price was occasioned by the continued urban growth, which has subsequently crippled affordable housing production.
"Land prices in Nairobi’s satellite towns range between Ksh9.8 million (US$83 149) per acre in Kiserian, to Ksh27.1 million (US$229 931) per acre in Ngong," read part of the report.
The report hailed the Kenyan government for offering various subsidies such as exempting payment of stamp duty for first-time homeowners under affordable housing as well as affordable housing relief pegged at 15 percent of employee's contribution.
The third measure to be utilised by the government was instituting Value Added Tax (VAT) exemption on import and local purchase of goods for construction for developers.
The report, however, noted that the subsidy incentive to developers was yet to be realised, hence proving to be a challenge.
Among the main challenges facing the country, according to the report, include the high costs of construction materials and the government reneging on the tax rebates and subsidies offered to developers.
This notwithstanding, President William Ruto's government committed to delivering 250,000 affordable housing units annually during his tenure.
Small and large-scale private market providers or individual owner-builders were praised for dominating the housing supply in Kenya.
In Nairobi, the county government offered its old estates to private developers for renewal and upgrading- as part of the affordable housing plan.
The move was hailed for the construction of 3,164 units at the Ngara-Park Road and Pangani affordable housing programme. The pricing, which is similar to the market price in urban areas, was, however, unaffordable for most Kenyans.
During the pilot phase, approximately 89 percent of contractors used locally available construction materials whilst 8 percent used imported materials, and 3 percent relied on both locally available and imported materials.
"A common trend among developers across urban and rural areas is the incremental construction of housing, first by building a temporary structure with a useful economic life of approximately 10 years, before constructing with permanent materials.
"Developers and landowners in urban areas undertake this mode of temporary construction for short-term income and speculation while holding the land for future permanent development," read part of the report.
