Housing Finance in Kenya

Overview

This profile is also available in French here.

To download a PDF version of the full 2020 Kenya country profile, click here.

Recording a 5.7 percent economic growth rate at the start of 2020, Kenya ranks as one of the fastest growing economies in Sub-Saharan Africa. This growth is expected to drop to 1.5 percent as a result of COVID-19. With a housing deficit of two million which is estimated to grow by 200 000 annually, the Kenyan government has established an ambitious Affordable Housing Programme (AHP) as part of its Big 4 Agenda. However the incoming supply of housing units stands at approximately 50 000 housing units a year with only two percent of this being for the low income market against an annual demand of 250 000 units.

Financial access (formal and informal) has improved in Kenya having expanded to 89 percent in 2019 from 26.7 percent in 2006, attributed to the introduction of mobile financial services and increased partnerships and innovations such as mobile banking. Despite 83 percent of total employment being in the informal sector, this portion of the population lacks access to mortgage loans due to insufficient credit risk information for meeting the criteria set in the mortgage products.

Mortgage uptake has remained relatively low with the number of mortgage accounts at 26 504 against a total adult population of approximately 23 million people, and the mortgage to gross domestic product (GDP) ratio at 3.2 percent in 2017 compared to countries such as Namibia at 20 percent. This is attributed to relatively high interest rates and unavailability of long tenors making the terms unfavorable for the majority of households, amid low income levels.

The home ownership and rental rate in urban areas stands at 21.3 percent and 78.7 percent, respectively. Low levels of home ownership are attributed to the unaffordability of housing units in the wake of spiking house prices, resulting from the high cost of land, construction costs and other costs such as the professional costs that developers must recover.

Find out more information on the housing finance sector of Kenya, including key stakeholders, important policies and housing affordability:


Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2020 edition, which has up-to-date profiles for 55 African countries.

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