The rapidly rising land prices across the country, which has for a while sparked fears that Kenya’s real estate sector could burst in the near future, is threatening the government’s Big 4 Agenda of constructing affordable housing units by the end of Jubilee’s second term.
While the increasing prices might spell profitability for the real estate investors, the market is becoming distorted by unreasonable and distorted pricing that could drive it beyond the reach of the middle-income segment.
According to Kennedy Ogeto, the Solicitor-General, the increased land prices alongside the lack of a conclusive land use policy pose a great risk to President Uhuru’s agenda of putting up affordable housing.
“The widespread tradition of land speculation by some investors has been instigated by unclear guidelines as well as uncoordinated policy and legal frameworks,” said the AG.
Hass Consult’s property index, which indicated that the third quarter of year registered a slow growth, believes that the slight drop in the land price is guided by cautionary approach many investors who are waiting for more “granular details of the State’s 500,000 planned units under the Big Four agenda.”
The elevated land prices need to be reconsidered alongside the policies and guidelines governing the sector. This will protect investors and entrepreneurs buying land apart from cautioning those who purchase land for speculative purposes instead of buying them for developmental goals.
The topic was discussed in Nairobi during the 2018 International Construction Research Conference and Exhibition (IcoRCE). The forum brought together researchers and institutions to discuss their research outcomes and how some of them can be used to grow the real estate sector.