Investment in middle and low-income residential housing is the latest cash cow, with those targeted toasting all the way to home ownership.
As the trend picks up in Nairobi and its environs, the reality that middle-level managers, bankers, investment analysts and all those other professions that form the bulk of the middle class can now own homes, is beginning to sink in.
Gone are the days when one's net salary had first to be in hundreds of thousands of shillings, before the thought of owning a house even crossed one's mind.
Also fading away are the days when owning a home was hinged on providing security in the form of huge tracts of land or other property to lenders.
Currently, almost every financial institution is warming up to provide mortgages to the middle-income group, if not already doing so.
Traditional home financiers like Housing Finance and Savings and Loan, are already knee-deep in providing mortgages, their core business, and are encouraging savings for home ownership among young, first time employees.
So are mainstream banking institutions, savings and credit co-operative societies and investment clubs.
Things have also changed in such a way that one does not need to be formally employed to access mortgage, as institutions battle for a piece of the market share for home ownership.
There is a scheme for the employed, the trader, those with huge parcels of land but no cash to build, you name it.
current scenario
This can only be good for the economy. It is a move that should be encouraged, especially with the statistics pointing out that only one in every eight people in Nairobi is a homeowner, with the rest being tenants.
The current scenario is the result of an initiative by a number of private developers, real estate experts, Ministry of Housing and the Treasury.
Under the market re-engineering initiative a couple of years ago, developers were accorded incentives to venture into the middle and low end sectors of the market.
Private developers were, for once, enabled to partner with the Ministry of Housing for basic amenities, such as sewage, clean water, electricity, and security to be provided.
Banks followed suit with increasing the amount of loans that they award to the real estate sector.
Then came the major road developments that opened up virgin land in various parts of the country, but especially the bypasses and famous corridors that have opened up areas of Nairobi that were once not thought to be habitable.
But while more needs to be done along the same lines, especially for cheaper more long-term loans, investors must not forget that the current scenario is the result of a long journey littered with lessons to developers and buyers alike.
A number had to burn their fingers for overpricing their houses when the quest for quick profits overshadowed anything else.
Some groups also pumped money into real estate blindly, without first analysing the investment climate, and are today deeply stuck in negative equity.
unscrupulous developer
Public-private partnerships, innovative mortgage loan products, and an ambitious middle class is a good thing for all.
However, extra care needs to be taken and the consumer protected from the unscrupulous developer, out to fleece Kenyans of their hard-earned money through substandard housing.
In light of the current boom in the middle and low-income segment, Prime Minister Raila Odinga's office also needs to urgently act upon a document presented to his office, which will allow developers to use low-cost, prefabricated building materials without having to seek special exemptions.
Source: The Standard | Online Edition
0 comments:
Post a Comment