THE STATEOF KENYA’S REAL ESTATE TODAY pt2
Read part 1 here
In comparison to buying readymade houses in Kenya, it is found that building of houses is comparatively cheaper. This is apparently made obvious as sellers are usually aiming to reap hefty profits averaging up to 150% of the building cost. Rates charged on housing mortgages are also high. In most cases it is highly economical to hire contractors for the actual construction. To build a four level duplex style block with each level consisting of 2 floor 3 bedrooms is estimated to cost KES 7 to 9 Million. Construction prices vary with choice of materials used, but the cost of construction using locally manufactured panels is almost equal to the average cost of constructing penalized houses KES 18000 per square meter. This is equivalent to an average of KES 1.6 million for constructing 90 meter 2 floor 3 bedroomed houses. Houses of such quality will cost slightly lower (KES 1.4 million) when imported steel panels are used instead and slightly higher using wood or cement fiber board panels. However with the Kenyan government set to reduce import duty on cement and to adequately improve on the railway and other transport systems, a drop in cement prices from KES 750 to KES 500 per 50kg bag is expected. Thus for a 90 meter 2 floor 3 bedroomed apartment there should be a price reduction of 30% margins from KES 1.7 million to KES 1.1 million
The Oriented Strand Boards (OSB) price for panels in china is equivalent to USD 3 (KES 270). A square meter of wall requires two boards and an insulation material, this approximate the cost to almost KES300 per square meter OSB China., additional 50% freight and port charges estimate the cost to KES 450 per square meter. This is much cheaper than machine-stone cutting or stabilized soil blocks commonly used in Kenya. With Steal panels, two steal sheets and an inner core of polyurethane Insulation material (SIPs) are used per meter wall. The OSB is preferred to the Steal panels due to the rising cost of steal with an approximate cost of a total of almost KES 1350 per meter of wall. The steal panels cost is much higher than the stone wailing and the stabilized soil blocks which cost KES 550 per meter. The FCB, costs at least a total of 600 per meter, it is more expensive than the traditional stone and soil stabilized blocks.
Fabricated housing constitute of only 30% of the total construction. It is limited to cover only the walls and the roofs. However the Diamond House Technology uses holistic approach to reduce cost in all elements of construction through the use of construction technology, use of phased residential house construction and use of lobour-based constructing procurement method.
Mombasa, Malindi and Lamu covers 480 kilometer of land at the beach of the Indian Ocean, which attract tourists, with them comes the need of resorts, lodging and housing facilities. Spot aimed property investments have been popular in tourist’s destinations in the country. The property investors are widely attracted to the coastal province of Kenya as an international tourist’s attraction site.
Due to the low living standards in Kenya and the stability of the economic and political sectors in the country, the holiday and retirement home seekers discover that they can afford good living standards in a beautiful part of the country. The tourist comes to Kenya to visit wild reserves and the famous Indian Ocean beaches. The investors took advantage of the situation through the establishment of the accommodation to let out to tourists and development of small commercial venture aiming the tourists. Tourism is the number one target for real estate not only in the coast but also in Kenya as a whole. Overseas real estate developers are increasingly taking interest into developments of second hand homes and retirement sectors.
The cost of buying ready built houses in Kenya is relatively higher than the cost of building. Different types of buildings vary in prices and in addition to this the cost is also highly influenced by the geographical location of the building. For instance, an estate in most areas of the central province, especially in areas such as Nanyuki is about 2 Million GBP while the same estate goes for between 90 to 110 GBP in areas close to Nairobi such as Lavington and Karen. The same estate fetches about 1.7 GBP in coastal regions such as Nyali, Malindi and Watamu. 3 bedroom apartments in safer areas of Nairobi such as Westland, Kileleshwa, Kilimani and areas along Ngong road cost around 52466 EUROS. Detached 4 bedroomed houses and 3 bedroomed cottages are estimated to cost around 206000 EUROS.
As much as every prospect of real estate in Kenya deserves pursuing, construction emerges as one of the best option of investment due to the relatively cheaper cost and the massive profits reaped from either selling or renting out property.
THE STATEOF KENYA’S REAL ESTATE TODAY pt2
Article by bestmombasa.com writer
Link dont just copy
