Daily Nation ­ Friday
Date: 25.04.2014
Page 34
Article size: 398 cm2
ColumnCM: 88.44
AVE: 214035.55
Only lpc urban workers can buy 238pc
own homes as rates hit the roof
after
BY NATION
CORRESPONDENT
Market
tracker says
Sh282,000
salary
needed to
buy a house
valued at
Sh5.7m,
with just
half of
Kenyans
in urban
areas able
to purchase
a house
worth
Sh700,000
through
mortgages
BY MWANIKI WAHOME
<K>mwanikiwahome
j wa home® ke. nationmedia.com
Ybu need to earn at least
Sh282,000 a month to buy a
house valued at Sh57 million,
as high interest rates price most buy­
ers out of the market.
According to HassConsult, a prop­
erty market tracker, only one per cent
of urban Kenyans would be elegible to
buy houses at the current rates that
range between IS and 18 per cent.
Sh57 million is the average going
price for a medium two­bedroomed
middle class house.
' Only another four per cent of the
population can afford a mortgage for
a SI13.9 million house at the current
interest rates, which have remained
largely unchanged this year.
Only half of Kenyans living in urban
areas can purchase a house worth
Sh700,000 through mortgages.
This indicates a serious hous­
and Sh28l,552.
"Even the often cited target of a
Shi million unit can hardly provide
housing to many people at current
mortgage rates, with just 20 per cent
of urban Kenyans able to afford the
mortgage on a Shi.i million house,"
said the Mortgage Company manag­
ing director Caroline Kariuki.
The experts are calling for alter­
native financing of housing, most
preferably a secondary mortgage
market and release of pension funds
to enable more people in urban areas
to buy their own houses.
"Pleas to the banks from many quar­
ters to cut their margins, and cut these
rates, remain resoundingly unheard,
even as the same banks unveil profits
of ever larger scales.
"In a market where the institu­
tions dedicated to providing finance
finance," Ms Kariuki said.
She said banks had mantained the
same interest rates since they had in­
creased their lending margins despite
a series of successive cuts in Central
Bank benchmark rates.
"There is a massive need for hous­
ing but 90 per cent of approvals are
in apartments, which indicate a low
financing for own house construction,"
said Hassconsult Ltd head of market­
ing and research Sakina Hassanali.
President Kenyatta and his deputy
William Ruto have been calling for
lowering of lending rates to enable
more people take up mortgages.
A committee has been formed to
study the interest rate regime and
make recommendations on how
they can be reduced. Mr Ruto said the
country had only 20,000 mortgages,
yet the potential, going by the level of
ing problem for the country. These are themselves stunting the take­off development of the economy, should
potential house buyers have a gross of this finance sector, it becomes im­ be about one million.
monthy income of between Sh36,459 perative to find alternative sources of
Ipsos Kenya ­ Acorn House,97 James Gichuru Road ­ Lavington ­ Nairobi ­ Kenya
Daily Nation ­ Friday
Date: 25.04.2014
Page 34
Article size: 398 cm2
ColumnCM: 88.44
AVE: 214035.55
BILLY MUTAI I NATION
HassConsuit research and marketing manager Sakina Hassanali (right) during the launch of the Property Price Indices for
the first quarter of 2014 at Hilton Hotel yesterday. She is with Mortgage Company managing director Caroline Kariuki.
Ipsos Kenya ­ Acorn House,97 James Gichuru Road ­ Lavington ­ Nairobi ­ Kenya