Possible fall in prices of property as Uhuru is set to launch housing project
Kenyans continue to register for the affordable housing project to be launched by President Uhuru Kenyatta soon. Through the Boma Yetu portal, Ministry of Transport, Infrastructure, Housing and Urban Development Cabinet Secretary James Macharia said many Kenyans had already declared interest in the project in what could jolt the housing property market.
Under the portal, any interested Kenyan above 18 years of age with national identity card would be required to submit personal details and their housing preferences during registration.Upon registration, they will be allocated a unique identification number which they will use to make monthly contributions to the Housing Fund with a mandatory Sh2,500 per month per employee and employer. However, the voluntary contributor with their monthly contributions will not capped.The first application exercise started by the State Department for Housing and Urban Development (SDHUD) from January 14, 2019 and will close on February 14; it will cover rounds 1A, 1B, and 1C of the Park Road.
According to Mr Macharia, the government will partner with the private sector through joint ventures and will be represented by NHC as the master developer in the project development process. “We will also provide off-take of qualified units through the Housing Fund,” he said. Macharia said they were waiting for President Kenyatta’s date for the launch of the project that seeks to put up 500,000 houses by 2022.In the project that will likely rattle the pricing of houses across the country, the government will contribute land and off-site infrastructure to the Special Purpose Vehicle that will be created under the Project Agreement. “We will alongside facilitate access to potential home buyers such as civil servants housing scheme, housing units for essential services and the general public through the housing portal under the Housing Fund,” Macharia said.The AHP project will allow for the development partner to source for third party financing where they will be required so as to contribute equity financing and development expertise to the SPV, which will also be able to leverage its resources with senior bank debt. The Institution of Surveyors of Kenya chairman Abraham Samoei admits the project will affect the pricing and possibly average the pricing.“It may not do so in the short term because of the restrictive nature of the project, but in the long run, it will bring the prices down,” he said.
Under the ambitious project, the government will put up 170,000 houses by the end of this financial year (2019/2020) using the controversial National Housing Fund deductions. The fund that was part of the Finance Bill signed into law by Uhuru last year, seeks to generate billions for the government to provide houses for the poor and middle class populace.The Housing Development Fund tax, will see employees part with 1.5 per cent of their basic salary as the employer contributes another 1.5 per cent. A five per cent penalty has been slapped on employers who fail to submit their contribution.AHP once completed, one-bedroom units will sell for between Sh600,000 and Sh1 million.Two-bedroom units will go for between Sh1.05 million and Sh1.5 million while three bedroom units will cost Sh2 million under the social housing programme.Kenya Property Developers Association chair Mucai Kunyia said they are still studying the impact of the Housing project on the acquisition of the current completed houses so as to come up with a comprehensive report.