Six things to look out for in property after 2017 general elections
SEE ALSO :Recipe for success of housing dream“The implementation of the 2017/2018 budget is underway, and those looking planning to invest in the construction industry should be upbeat,” says David Mathu, National Construction Authority manager in charge of research and business development. Here are some of the opportunities to look out for if you are planning to invest in real estate: Fair prices of construction materials For the last six years since 2010, cement consumption has been on the rise. Increased construction activities like the boost from the SGR construction largely contributed to the increasing demand. According to Kenya National Bureau of Statistics by March 2016, consumption had increased by 33 per cent which was equivalent to a 1.4m tonnes increase. This means that with more construction activities expected in the real estate and construction sector, the prices are poised to soften further. According to KeNHA’s director general Peter Mundinia, the government has already earmarked the expansion of a number of highways, oner being the new high speed Nairobi to Mombasa highway which will cost Sh230 billion. Bechtel International, a US based engineering firm will do the construction after signing the agreement with the the highway authority.
SEE ALSO :Bathroom storage ideas“Bechtel has been selected to construct the first high-speed expressway in Kenya. The 473-kilometre highway will improve connectivity and safety of the road between Nairobi and Mombasa,” says KeNHA’s director General Peter Mundinia. This is an indication of an expected boom in the construction industry, thus, if indeed it will impact on prices, investors in the real estate’s housing and construction sector should look up for more good times. When the rise in demand got to its peak owing to an increase in cement consumption was experienced in the first quarter of 2016, the average price of a 50 kilogram bag of cement reduced from Sh700 to Sh650. Tax waiver incentives According to Edward Ng’ang’a, a land procurement manager at the Diamond Property Merchants, real estate is a major source of tax revenue in the form of land rates and other tenancy remittances. “Before you invest in real estate, you have meet some tax obligations to get approval,” Ng’ang’a says. “Many land and property owners owe county governments tax. When they advertise for waivers, real estate investors should take advantage of the incentive,” he says.
SEE ALSO :Fruits as part of landscapeInfrastructure tenders Are you a contractor or a sub-contractor? This post-election moment is your time. “Compliance among contractors has been encouraging. This year, almost all registered contractors have renewed their licences with the construction authority,” says NCA’s Mathu. According to Mathu, the high compliance level is an indication of a positive year ahead since those who do not comply with industry requirements are normally locked out of projects. Industry statistics point to good fortunes ahead. The disbursement of funds from the Roads Maintenance Levy Fund by Kenya Roads Board to various road agencies and county governments offers a new ray of hope for the contractors. The levy has been increased to Sh40.9 billion from Sh25.4 billion. “Increased activity in the construction of roads and the development of housing translates into an increase in employment opportunities, tenders and tremendous industry boost,” Mathu says. Overall expenditure on roads is expected to increase by 38.3 per cent from Sh113.2 billion to Sh156.5 billion, according to KNBS, with total development expenditure also expected to grow by 31.7 per cent from Sh87.8 billion in 2015/16 to Sh115.6 billion.