Housing Finance in Kenya


Kenya has a rapidly growing real estate and housing finance sector.  As the mortgage market does not yet meet the breadth of the population who might afford a mortgage, most households still finance their housing independently, with savings or non-mortgage credit.

The lowest recorded interest rate on a mortgage in Kenya is 17.1 percent, as of September 2016, and requires at least a 10 percent down payment. There are currently 24 458 mortgages in the country, with the average mortgage size being US$ 81 717. The cheapest newly built house by a developer recorded by CAHF is US$ 15 753, which is for a 30 square metre unit. Cement prices are lower than the continental average, at US$ 7.29 for a 50-kilogram bag.

With an urbanisation rate of 4.28 percent, demand for affordable housing will remain strong, also for affordable rental. Housing microfinance will play an important role in increasing the supply of housing, and efforts to increase access should be undertaken as the current average microloan size is only US$ 197. The recently imposed cap on interest rates may adversely affect one of Africa’s most encouraging affordable housing markets, but other encouraging policy, such as a tax incentive for affordable housing developers, will likely support market growth. With a good macroeconomic environment, sound policy, better data and increased access to affordable credit, an enabled housing market can increasingly provide housing that the average Kenyan household can afford. More information on the Kenyan Government’s view on affordable housing can also be found here.

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 2017 edition, which has up-to-date profiles for 54 African countries.

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