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Kakamega's booming property market

By Roselyne Obala and Joel Okwayo, Feb 21 2008
Western Kenya’s property market received a boost after the introduction and elevation of Masinde Muliro University of Science and Technology to a full-fledged varsity. The university has caused an acute shortage of residential housing in Kakamega town. Local investors have flocked the property market to cash in on the demands for accommodation by students and staff from the institution. This is despite recent political skirmishes that left a number of houses burnt down and threatened to reverse the trend.

The town is registering a fast growth with the sprouting of commercial colleges and financial institutions.

kakamega

Kakamega town is registering a fast growth with the sprouting of commercial colleges and financial institutions.

Some landlords have resorted to converting residential houses into rentals and benefit on the current market demand by charging exorbitantly.

The houses vary in prices according to their location.

Western Kenya Property Valuer, Mr Geoffrey Koros says residential housing is in high demand as compared to commercial one as few new buildings are coming up.

A one-bed roomed house, self-contained goes for Sh5,000 while a bungalow is between Sh20,000 and Sh25,000 a month. Estates such as Milimani, Amalemba, Maraba, Lurambi are fast growing as they are near the university. The post-poll violence has been a blessing in disguise for landlords. Renting a house in Kakamega is like renting a house in the rich suburbs of Nairobi.

Between November and December last year, the provincial Physical Planner received 14 housing plans from Kakameaga for approval. This year, things seemed to have taken a different dimension with only two building plans received so far from Mumias District. Many students are not staying within the university premises due to inadequate housing and moved to other areas, giving landlords a reason to hike the rental rates.

Houses whose rent was Sh2,000 have now increased charges by 50 per cent due to demand. Some of the students are being forced to commute from Mumias, Vihiga and Lugari districts due to lack of accommodation in town. However investors are concentrating mainly along the main roads, leading to congestion as the customers seek extension services and good security.

Many buildings that were on course in the region had stalled due to the violence because some local investors were internally displaced. Some of the existing houses estimated to be worth millions of shilling were also torched during the skirmishes rendering many homeless. Ms Domtila Geti, a Physical Planner attributes the high cost in housing to rising land prices.

Koros says a quarter acre of land at Maraba goes for between Sh600,000 and 800,000, while an eighth of it at Amalemba goes for Sh400, 000. In Lurambi a quarter piece goes for Sh400,000 with a three bed-roomed house in the area going for between Sh1.8 million to Sh2 million. A housing crisis looms as students are scheduled to resume college and may find their former residential houses looted or burnt.

A standard housing project, fitting with the all the basic needs like good sewage, electricity and water stands at over Sh2 million. The property valuer says the housing rate differ depending on where the house is situated. The prices may be high depending on the class of people who reside from there like doctors, lecturers and senior officers in the public sector.

He attributes the shortage in housing in the region to lack of foreign investors. The Western Province Housing Officer, Mr Hezron Ondiek said houses meant for civil servants were inadequate. He said the housing industry in Kakamega town was incapable of accommodating workers posted in the town. "With the growing demand, the industry in Kakamega needs more residential places to accommodate workers posted in the area," he said.

Financial institutions operating within the town council have appealed to the residents to secure loans in order to invest in this growing sector. Equity Bank Kakamega branch manager, Mr Phillip Waswani said the institution was ready to offer loans to residents in order to engage in development programmes, which include housing.

The National Housing Corporation (NHC) is set to put up more than 40 housing units in Kakamega town to ease congestion among residents. The council has already identified plots where it will construct the houses. The clerk to the council, Ms Margaret Jobita and finance committee chairman, Mr Eliud Omukuyia have already finalised plans for the project, which will commence this year.

As the council struggles to resolve the accommodation issue, individual investors are also slowly shifting to the commercial sector, which has not picked-up. Koros said the commercial sector lacks serious investors as the locals are yet to realise the needs for modern offices. "The investors would rather settle on the booming business of residential premises than constructing offices whose demand is still low," he said.

And the Kenya Union of Savings and Credit Cooperatives (Kussco) has loaned out more than Sh200 million to its members to put up houses. Kussco Managing Director, Mr Carilus Atemba, said the funds were disbursed to members under the organisation’s Housing Fund. The fund was set up to provide loans to members of co-operative movement affiliated to various co-operative societies.

Source: Standard


Building costs to come down by 30%

By Morton Saulo, Nairobi, Sept 12 2007
The cost of building in Kenya could be reduced by as much as 30 per cent and construction time reduced by half if the Building Code is altered to accommodate technologies. This means construction of a home that currently costs Sh2 million will cost Sh1.2 million. The Government recently formed a task force comprising of building experts from the private and the public sector to oversee the alteration of the Building Codes to accommodate new technologies.

This comes soon after a recent visit by a Malaysian government and construction industry experts delegation led by Works minister, Mr Dato Seri. The Malaysian team expressed willingness to construct a factory, which will cost both the Kenya and Malaysian governments $12 million (Sh840 million to put up. The new mill will avail cheaper building materails and cut time spent on construction.

Housing minister, Mr Soita Shitanda, said earlier his ministry has 200 acre piece of land in Mlolongo near Nairobi and part of the land will be used for the factory in addittion to an appropriate technology centre. On completion, the factory will be handed over to National Housing Corporation.

The partnership comes after the Government zero rated all buildings materials used in the construction of at least 20 low cost housing units. Kenya is in dire need of a housing scheme for its lower and middle class that accounts for 60 per cent of all urban population. This has culminated into a situation where 70 per cent of Kenya’s urban population depends on rented houses as opposed to owning homes.

The 1968 Building Code, currently in operation, requires constructors to adhere to what is now costly and time consuming building measures that are not in use in developed countries. It calls for building foundations, structural steel works, walls and partitions of blocks and slabs to be load bearing. "All walls built of stone, bricks shall be hard durable and suitable for the purpose which they are used," it states.

The Permanent Secretary Ministry of Housing, Mr Tirop Kosgey, says the current building code is based on old technology at a time when new innovations are available. He notes that plans are at an advanced stage to acquire technology that allows for the construction of many houses at cheaper costs and limited time.

"Technology now advocates for lighter materials but materials with more strength to support buildings. Such materials can also withstand an earth quake as compared to the current weighty materials," he says.

Under new technology, construction and drying of a building floor will take only one day to dry up as compared to the current one-month duration. "In Malaysia, constructors’ pour building mixtures in the evening. Some 12 or so hours later, the floor is dry and ready to support the next floor. It is one day for one floor once the beams are erected," Kosgey said in an interview with Real Estate.

The Ps says machines used in this technology pour the construction mixture uniformly on building floors and their beams. The technology has attained the world-class safety standards and used in most developed countries and has been used to construct buildings of up to 20 floors.

Malaysia uses the European Union building code while Kenya uses the British building code. This means adopting of the new technology here should not be an issue. "The technology has been reviewed and passed by various economies and we are exhausting ways of fast tracking its usage in Kenya," Kosgey says.

However, the Malaysian government is not ready to invest in the $12 million factory if the ready market is not available. Markets can only be availed once the building code is altered to allow property investors use the technology. The ministry is exploring alternatives to accept the technology since the old building code remains a barrier. "We are currently considering using the adoptive by laws and classify an area to give in special approval for low cost houses."

Technical information about the new building technology is with Kenya Bureau of Standards and is looking for extra ordinary ways of accepting the technology prior to alteration of the building code. -- Source: Standard

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