Property developers seem to have rushed to reap from the rebounding economy against the backdrop of the subsiding effects of the coronavirus pandemic.
A case in point is the fresh data from the National Construction Authority (NCA) compiled by the Architectural Association of Kenya (AAK) indicating a sharp increase in building fees. According to the report, the value of construction projects seeking permits in the capital city increased to Sh118 billion in six months until December last year.
The permit application fees paid to the Nairobi Metropolitan Services (NMS) were among the highest revenue earners for the capital city. The data further shows that the application fees increased from Sh215.9 million between July and December in 2020, to Sh479.6 million in a similar period last year.
The number of submissions dropped from 970 in the second half of 2020, to 638 in a similar period in the following year, indicating that the new buildings are of high value.
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It also showed that there were a total of 471 applications of building plans submitted for consideration between July and December last year.
The report published in the recent Built Environment Status Report of the AAK is a pointer that the construction sector is recovering from the economic slowdown post corona.
The real estate sector took a beating from the pandemic over reduced purchasing of houses and demand for commercial property as organisations adopted the work-from-home policy.
A survey conducted in June by AAK on the impact of Covid-19 on real estate showed that 87.5 per cent of consultants experienced significant decreases in clients’ inquiries for new projects.
According to Cytonn Investments, the local real estate sector will continue to grow into 2022 after a positive trajectory in 2021. Lending financial institutions such as banks and Saccos also seem to support homeownership through offering affordable mortgage schemes with bespoke terms to clients to increase mortgage uptake.
The Kenya Mortgage and Refinance Company recently announced a 143.5 per cent increase in mortgage loans to primary lenders to Sh7.0 billion from Sh2.8 billion. These initiatives demonstrate a continued focus on increasing mortgage accessibility and uptake to individuals.
A recent report by Knight Frank indicates prime residential sale prices in Nairobi marginally improved by 1.2 per cent over the past six months.
- Harold Ayodo is an Advocate of the High Court of Kenya