Real Estate Record a 12 pc Fall in 2018
The Nairobi private construction sector in the past year didn’t show a positive sign of improvement after being on a downward momentum, marking a 12.8 percent fall. The industry which in the previous years recorded an upward trend saw only Sh210 billion worth of projects approved.
In the year 2016, the sector recorded Sh308.4 billion worth of projects after recording Sh215.2 billion in 2015 and Sh205.4 billion in the year 2014.
The downward trend recorded in 2018 was attributed to several factors, among them being delays by the regulatory to approve projects and the diminished credit from the local financiers after the capping law taking effect in 2017.
According to the Central Bank of Kenya (CBK), key players in the real estate sector recorded the highest number of loan defaulters after failing to pay Sh44.4 billion, equivalent to 15.8 percent.
The country saw new investors take on the real estate business among them being the Saccos and standalone home developers. This came after the sector was given Sh113.7 billion of loans by the commercial banks.
It is due to the downward trend that saw the cement consumption in the country reduce by 2.6 percent to 6.1 million, this being the second year a similar downward trend is recorded in the industry.
However, the sector is expected to rise significantly as the government plans to inject Sh29 billion in public housing projects something which might see the record rise by 57.3 percent to Sh18.4 billion this year.
The government plans to deliver 500,000 housing units by the year 2022 under the Affordable Housing Programme (AHP) set to benefit low and low-middle income earners, in line with President’s Big Four Agenda.
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