The fast rising cost of houses in Kenya is locking out many potential buyers especially from the middle to low income brackets.
Data from various real estate and housing development firms shows that a two bedroom apartment in Nairobi and most major Kenyan towns is selling for an average $44,048 to $90,000. In high income areas, the cost could go to as high as $95,238.
About three years ago, the same units cost between $35,714 and $60,000. Similarly, the prices of three-bedroom apartments vary from $78,350 to $140,285 in high-end suburbs.
Developers are opting for apartments as opposed to stand alone structures in order to maximise their return on investment.
On a quarter acre piece of land for example, most developers will construct two blocks of apartments, each comprising a minimum nine houses each. The trend has gained currency in recent years as land becomes scarce.
Antony Kuyo of Avent Property Agents in Nairobi’s Eastlands area said this, as well as the rising cost of building materials is to blame for the high cost of houses. In the capital, a quarter acre of land sells for between $14,285 and $47,619, depending on its location.
“This forces developers to push up prices if they are out to make a return on investment,” he said.
Kenya’s real estate sector has grown over the years into a multi-billion-dollar industry, with the number of players increasing fast.
The sector is one of the drivers of Kenya’s economy, a fact the Kenya Revenue Authority is keen to tap into. Recently, it ordered landlords to pay taxes on rental income or be penalised.