“Is there an oversupply of houses in this market?” a friend asked me the other day over lunch. Oversupply? Hell, no. Kenya is far much under housed, at least if we are to go by the statistics issued by the government agencies.
The demand for housing in Kenya is over four times the current supply. This you can tell by the portion of the population still staying in the informal sectors, which is currently alarmingly high.
One might say that these people are not catered for in the current supply because of their income levels. And so the biggest indicator for an under-supplied housing in the country is the prohibitive selling price of houses because of less than perfect national demand levels.
But I agree that there are a few more buildings that look unoccupied now than ever. I also agree that some buildings are taking longer to sell than they did a while back. But this is good for the market because there will be what we call market harmonisation. The prices of houses will balance out and start making sense and hence more people will be able to afford.
Haven’t you noticed that houses that are selling at less than Sh5 million are starting to appear more in the adverts? It was not like this two years ago. And these houses are not just to be found in the outskirts of Nairobi, but even in the coveted prime markets near the city. House prices seem to make sense enough to qualify for mortgages.
This is good for the market. And while the developers may be complaining a little bit, and banks too, because the number of non-performing loans is increasing, it won’t be for long, hopefully.
Excitedly, there is also something else that’s being caused by this phenomenon; developers are becoming more efficient and careful. They are keen on quality of the houses they are supplying now more that ever. They no longer copy and paste designs of buildings, but are now looking to deliver unique structures.
And they are careful when selecting the most efficient technologies to deliver the houses,¡ so as realise good returns. It’s as if we are geared towards a market where the customer matters, because he can now choose and has options and choices. The writer is managing director, Anka Consultants Ltd, quantity surveyors and project managers. Email: [email protected]