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First survey in 30 years to inform housing sector

REAL ESTATE
By | December 22nd 2011

The Ministry of Housing recently commissioned the Kenya National Housing Survey 2011/2012, which is expected to provide data that will give a better understanding of supply and demand in the property market, as well as provide solutions for housing problem, writes NJOKI CHEGE.

The property industry is arguably one of the most lucrative and fastest growing investments in the country, but it is also riddled with lack of proper, accurate data that can be used to make investment decisions. There is, therefore, need for a thorough survey that will put an end to speculation when it comes to investing in this industry.

The Kenya National Housing Survey 2011/2012 is being carried out by the Ministry of Housing with support from the Kenya Institute of Public Policy Research and Analysis (Kippra), the Kenya Property Developers Association (KPDA) and real estate consultancy Scion Real.

Apartments in Nairobi. Lack of current and detailed data makes it difficult to estimate the housing demand and supply parameters. [PHOTOS: JENNIPHER WACHIE/STANDARD]

According to Tirop Kosgey, Permanent Secretary in the Ministry of Housing, the current information gap in the housing sector necessitated this move, with the last survey of a similar kind being carried out way back in 1983.

"There is a need to report on or inform new national policy goals including the medium term plan of the Kenya Vision 2030 and the Millennium Development Goals. There is also the need to lay basis for development of county-specific housing development agenda and goals under the new constitutional dispensation," says Kosgey.

As Kosgey explains, operation of the sector has been largely guided by benchmark data derived from census from 1989, which is never detailed enough to inform certain specific policy and programmatic interventions.

"For instance, because of the limitation on what extent census data can cover, there has not been reliable data on the situation of slums and informal settlements and as a result, previous estimates of people who live in slums and informal settlements have been mainly based on subjective estimation," says Kosgey.

It has been difficult, for instance, to estimate the housing units delivered every year, meaning it is hard to accurately estimate the housing demand and supply parameters.

INVESTMENT DECISIONS

Laila Macharia, the chairman of the KPDA concurs with Kosgey, saying investors and policy makers have been making serious and sweeping decisions without any clear data, hence the need for this survey.

As Macharia notes, this means some of the solutions that have been created may not be tailored to the actual challenges on the ground as far as the property industry is concerned.

"In order to allocate resources properly, we need concrete information on how the housing market works. Lack of information also makes builders scared, which can drive up prices. The survey is the first step in getting a better understanding of supply and demand in the property market," says Macharia.

The survey is expected to bridge the information gap in a bid provide investors, property owners, banks, governments, researchers and the public with critical data on the housing sector. Currently, the housing supply does not meet the demand, especially where affordable housing is concerned. This survey will enable key stakeholders in the property industry understand and estimate housing demand and supply, providing them a solid basis for decision-making.

The housing sector also lacks a comprehensive basic legal framework for co-ordination, facilitation and monitoring of the contribution of the actors.

Most of the housing delivered is mainly by the private sector, which in any country cannot delve into the lower end. At the moment, most of the housing delivered by the private sector intended for the middle-income cost more than Sh7 million.

LOW INCOME

There is a significant percentage of Kenyans with very low incomes. According to the Kenya National Bureau of Statistics (KNBS), more than 70 per cent of wage-earning Kenyans get less than Sh25,000 per month, which cannot enable them to access housing delivered by the private sector.

Says Kosgey: "This then means there is need to enhance public investment in housing to facilitate access to adequate housing by the low income segment of the population. Increase in public investment and guidance of housing development is, therefore, critical at this stage."

According to Kosgey, the mismatch between the nature of housing product being delivered in the market and the affordability of the greater majority has been thus exploited by unscrupulous people through the proliferation of slums and informal settlements on the one hand and over densification of some formal estates to an extent that is becoming unsustainable.

The survey will go a long way in resolving the current housing crisis because once there is concrete information, policy makers can better assess challenges and investors will come up with more responsive market-based solutions.

Laila Macharia, (Chairperson, Kenya Property Developers Association)

"Government planners including the Ministry of Housing, its strategic partners and key informants will be better positioned to help in unlocking the sector’s potential by providing the required data to local and foreign investors who have shown interest in tapping into this robust growth," says Kosgey.

Performance measurement will benefit and inform important programme implementation processes as well as guide decisions on various interventions at local and national levels.

The PS also notes that the housing indicators collected will feed into housing policy decisions and enhance knowledge about the housing sector.

Besides furnishing the industry with sufficient data in the property industry, the survey is also geared towards assessing housing needs and providing viable solutions for the housing sector. The survey will provide a basis for the review and attuning of the national housing policy to the new Constitutional order.

According to Macharia, this is a complex, large survey. It requires fieldwork in all counties as well as in specialised groups. There will be a household survey targeting owner-occupiers and renters as well as specific, smaller surveys of key building sector players — developers (formal and informal), professionals, financiers and public agencies.

The survey will consist of two main components: The household survey, which consists all the 47 counties, including the major urban areas and rural urban areas.

The other component will involve the key informants such as housing professionals, housing financiers, housing developers and regulatory bodies.

KNBS will be executing the survey as they have the mandate to produce government statistics, decades of exceptional experience and expertise in the field. KNBS also has access to pre-determined survey clusters, field offices and data collectors that make them quite efficient in pulling together data from around the country. While KNBS had carried out a similar research in the 2009 census, this survey is different because the National Housing Survey seeks detailed questions from different players in the housing sector.

Says Macharia: "It has the goal of establishing the status of supply, which was covered briefly in the census at a very high level, in far more detail. This survey also looks at behavioural choices informing supply and demand and also goes in-depth with builders, financiers, professionals and even regulators to see how these groups are helping or hindering housing supply."

The outcome, Macharia says, will be robust and rich data that will be in public domain for various uses.

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