Hope for cheaper homes as NHC puts up plant to make materials

Middle and low income home hunters will be relieved by the end of this year when a factory being set up by a State corporation starts producing affordable housing materials.

National Housing Corporation is putting up buildings in Mavoko to host the plant that will produce prefabricated materials with the aim of stepping up efforts to provide homes in the country.

“The plant is being assembled in Italy. We are hoping that by July or August (this year) we shall be doing the testing and by end of the year to be in production,” NHC managing director James Ruitha said on Tuesday.

He said the factory will enable faster construction of houses for the lower end market segment, which has been hit hard by escalating cost of the conventional houses.

“We had to look for a technology that would act like a conveyor belt in a motor assembly plant; that is the only way to deliver houses in a large scale,” Mr Ruitha said of a plant, whose total cost is estimated at Sh700 million.

The corporation, he said, identified the technology after visits to China, Italy, South Africa and America.

Speaking at a Nairobi hotel when the NHC was awarded an ISO certification, Mr Ruitha said the supply side of housing is a major challenge despite the availability of funding from the private sector through the public-private partnerships.

Average mortgage loan

According to a study on mortgage released recently by the Central Bank of Kenya and the World Bank, the average mortgage loan is approximately Sh4 million, which reflects on the expensive housing market or a predominance of high-income mortgage borrowers in Kenya.

The study titled: Mortgage Finance in Kenya: Survey Analysis, notes that the average mortgage loan size has been growing steadily since 2006 when it stood at Sh2.5 million to the current Sh4.4 million. Mr Ruitha said they intend to raise funds by floating a bond.

According to the government, demand for houses had increased from 150,000 units per year to 200,000 units, most of it in the lower-end segment, and required new approach.

The lowest housing unit is in the range of Sh2.5 million, which remains unaffordable for a majority of the population.

The new materials are expected to considerably cut the cost of housing.

Housing Minister Soita Shitanda said the Building Code has been reviewed and once it is signed into a by-law, the corporation will be able to expand its range of building materials and technology.

He said the Housing Act (Cap 117) will be reviewed and renamed National Housing Corporation Act.

A separate housing sector law will be enacted as the National Housing Act.