With studio apartments in Nyali going for as little KES 7.1 million and 4 bedroom massionettes selling for KES 10.5 million off Mombasa Road, now seems like the best time to buy a home. Based on data from the United Business Association (UBA), Kenyans have been slow to respond with less than 20,000 homes  under mortgages in a country where more than 1.8 million people have jobs in the formal sector.

Granted, some home owners actually buy their houses and others inherit them while the rest pay rent.  The few that can afford to purchase housing in lump sums are obviously the corporate elite.

A presentation by the National Housing Corporation (NHC) reports that only 16% of the urban population actually own their homes. The same presentation states that over 2 million people in Nairobi alone need decent affordable housing. A one room iron sheet house in Mathare can cost KES 500 a month while a 2 bedroom apartment in Lavington can go for KES 155,000. Those paying steep prices may be better off saving that money to buy their own homes.

Long Term Expenses

Saving for a house or taking a mortgage are long-term investments with the latter running anywhere between 10 and 20 years. Those that opt for mortgages end up paying more for a house than its initial worth. Property developers like  Gao Yu have been known to charge at least KES 2 million more for housing if the buyer chooses a mortgage instead of a lump sum. By the time someone has saved up enough money to purchase their dream home, the prices have changed.

Luxury Housing Boom

Kenya has been experiencing a boom in the luxury housing market, according to real estate developers and a recent report by Citi Private Wealth. CNN  even reports that property value increased 25% last year making Kenya one of the world's fastest-growing residential property markets. The housing market has experienced major changes over the past few years. Low-cost housing has sat in the sidelines as villas, beach resorts and luxury apartments take center-stage. Despite the global economic crisis and the ever-changing state of the country’s economy, property prices are always on the rise.

Speaking during the East Africa Housing and Construction Expo at the Sarit Centre on Thursday, real estate representatives noted that housing prices would continue to change based on the country's economic environment. Anoop Nathwani, an Elegant Properties representative said that the country’s improving infrastructure would cause house prices to jump.

People living around the Thika super highway have already experienced the sharp edge of progress as rent prices begin to peak. Landlords know that infrastructure plays a major role in the real estate sector. Convenience becomes a luxury, especially where it did not exist before. In light of these changes, low-cost home owners may have to cope with steeper expenses in the future.

Marketing Potential

Ravi Vista, Director of Mark Properties noted that the luxury market held a lot of potential for property developers and buyers across the country. Places like Mombasa are already set for a development boom as real estate developers scramble for their stake in one of the continent’s premier tourist destinations.

One Twiga, a two-block apartment complex will begin its ground-breaking ceremony in Nyali sometime next week. The project will have 4 bedroom duplexes priced at KES 25 million each. Other projects like Pearl Residents are 95% complete. Buyers have already laid claim to some of the apartments with potential occupants making deposits at least 3 months ahead of completion.

Affordable Housing

On the other hand, Minister for Housing, Bishop Margaret Wanjiru said,“The Ministry of Housing is committed to facilitate provision of decent and affordable housing, ensure regulatory and statutory requirements are adhered to and to continually improve the quality of our services as per the Quality Management System.” She stated that the government was moving closer towards the Vision 2030 initiative in line with their low-cost housing policy.

This comes shortly after Hass Consult and Mark Properties unveiled the construction of a 22 storey complex that will offer a mix of homes, businesses and recreational facilities The building, dubbed Le’ Mac, will be the largest complex of its kind.