Below is the Mortgages and Real Estate chat log from the ongoing “My 15 Min Chat with a Bank CEO”. The chat session was hosted by Frank Ireri, Managing Director, Housing Finance and Habil Okala, Kenya Bankers Association Chief Executive Officer.

“My 15 Min Chat with a Bank CEO” is a four weeks online chat session with a bank CEO that gives you an opportunity to connect and engaging a bank CEO in a conversation about banking topics you might be interested in.

This  chat log contains information about mortgage industry growth.

(Q) Jwahome: I would probably want to ask why the mortgage uptake is so low in Kenya

(A) Frank Ireri: Thank Jwahome for getting us started…several challenges: cost of homes; mortgage requirements i.e. closing costs: interest rates…Mostly we find that homes are expensive because of high cost of land, high cost of infrastructure and high inflation…on closing costs - there's deposit to be made as well as legal fees, valuation and stamp duty which can account up to 15 per cent of the house cost… I hope this helps answer your question.

(Q) ceochat: A question came in earlier via email…Why the slow progress on Real Estate Investment Trust (REITs)

(A) Frank Ireri: thats a good question...REITs are a work in progress...in fact today there is a workshop going on between the CMA and the stakeholders...so it is our hope the final regulations will be completed in the next few months

(Q) DreamCatcher: @FrankIreri, What are some of the implications of having a Land Commission & the new Lands Act? 

(A) Frank Ireri: Thank you DreamCatcher, the act has gone a long way to protect the borrowers...to ensure for married people both spouses approve, assent to the borrowing...also financiers/banks have to FULLY explain the implications and costs of the borrowing...so generally the spirit of the new Laws are to protect borrowers which banks will fully adhere to.

(Q) ceochat: Can Kenyans living abroad access financing?

(A) FrankIreri: On external demand, there are banks that offer real estate financing to the diaspora…in fact we have seen that the US and the UK are the most active markets for Kenya real estate

(Q) softie: Frank,a question towards HF,what do we expect in the next 5-10 yrs,

(A) FrankIreri: Lets talk about the future of real estate in Kenya... We foresee a lot of activities in the counties...as we devolve, we see the creation of a lot of satellite cities as our road infrastructure improves across the country...with this in mind people should look to invest beyond Nairobi

(Q) DreamCatcher: @FrankIreri. I remember countries like Singapore being a shanty city but today they are a middle income country with housing units for a majority of their citizens. What part will the Ministry of Housing, National Housing Cooperation (NHC) & Housing Finance (HF) play in order to upgrade slums such as Kibera?

(A) FrankIreri: I see a question about slum upgrading...and the Ministry of Housing...the Ministry has taken the lead in upgrading some parts of Nairobi slums...we expect to see much more of this as we devolve as a country

(Q) DreamCatcher: @FrankIreri. What has Housing Finance done in order to assist the youth & Kenyan poor own their own homes? Are we experiencing a housing bubble where we have seen the prices of land more than triple since 2003?

(A) FrankIreri: DreamCatcher, Housing Finance has come up with products e.g 1st HOP to encourage youth to save towards owning their own homes...in my opinion, I don't think we are experiencing a housing bubble...because the demand for housing is still much, much higher than the supply…in fact we have seen demand locally as well as from Kenyans in the diaspora

(Q) DreamCatcher: @FrankIreri. Thank you for the candid responses. I believe there is a lot of room for banks to mentor the youth on investment avenues such as real estate. Keep up the good work & I hope to see more from Housing Finance. 

(A) FrankIreri: I saw a question about mentorship of youth...many banks through their CSR/social responsibility programs hold forums for youth to mentor them on banking, and investment...at Housing Finance we do barazas across the country to educate the public on property investment

Chat log sourced from www.kba.co.ke