× Business BUSINESS MOTORING SHIPPING & LOGISTICS DR PESA FINANCIAL STANDARD Digital News Videos Health & Science Lifestyle Opinion Education Columnists Moi Cabinets Arts & Culture Fact Check Podcasts E-Paper Lifestyle & Entertainment Nairobian Entertainment Eve Woman Travelog TV Stations KTN Home KTN News BTV KTN Farmers TV Radio Stations Radio Maisha Spice FM Vybez Radio Enterprise VAS E-Learning Digger Classified Jobs Games Crosswords Sudoku The Standard Group Corporate Contact Us Rate Card Vacancies DCX O.M Portal Corporate Email RMS
×

Institute wants Sh50 billion revolving fund for housing recovery

REAL ESTATE
By Mwangi Muiruri | May 28th 2020

The government should set aside at least Sh50 billion to rejuvenate the housing sector, according to local economic institute.

The Institute of Budget and Devolution says the sector has received a beating for the past three months from the coronavirus pandemic after coming out of a sluggish year, with recent floods aggravating the issue further.

Elias Mbau, the institute’s boss, told Home & Away that the real estate sector will find getting back to recovery hard because builders, buyers and sellers have been starved of cash and returns are “dwindling by the day”.

He said that to build enough houses for emerging demands, the economy must be growing at a rate of over six per cent.

“Such a percentage depicts high cash flow, less inflation and low demand on credit hence relaxed repayment terms. Currently, coronavirus and floods have slowed economic growth projection to below two per cent,” said Mr Mbau.

“More reason why the government should pump money to critical sectors, housing being one of them.”

He said the sector can only be rejuvenated through a revolving fund to be utilised for the next two financial years to give zero-rated interest to housing cooperatives as well as provide heavy tax subsidies for the private sector to realise the housing agenda by 2022.

House deficit

“Not that there is any chance that the agenda of building a million low-cost housing units by 2022 is realisable. But we all know it was a good projection that should not be derailed by restricted time-frame and the hardships that the viral scourge and floods have presented,” Mbau said.

Data from the National Housing Corporation (NHC) shows that the house deficit is two million units and grows by 200,000 each year.

At the end of 2017, the mortgage stock in Kenya was Sh223 billion, equivalent to 2.74 per cent of gross domestic product (GDP).

This compares poorly to a country such as South Africa that has an outstanding mortgage stock close to a third of her economy at 31 per cent of GDP.

According to NHC, housing mortgage in Kenya remain below its potential with major inhibiting factors including lack of access to long-term finance, high interest rates and high cost of houses.  

Covid 19 Time Series

 

Share this story
Women lose men, property to Corona
In Kenya, there is anecdotal evidence of widows being forced out of their homes by their in-laws during quarantine as they are seen as an extra burden
Survey: Why 40 pc of workers want to quit their jobs
More than half of 18 to 25 year-olds in the workforce are considering quitting their job. And they are not the only ones.
.
RECOMMENDED NEWS
Feedback