A survey has revealed that middle-income housing is in low supply in the city despite an oversupply in the high-end housing markets.
Nairobi’s middle-income population is expected to increase by 5.6 percent to 250,000 households by 2024 according to research by Mi Vida- a real estate affiliate of Actis and India’s largest real estate conglomerate Shapoorji Pallonji.
The study shows that the estimated 3,000 housing units produced for the middle-income segment annually in Nairobi, leave a big shortfall in supply.
“There is huge potential here that just needs to be unlocked. More people are moving into the middle-income bracket but most project developments are not keeping up with the real demand,” Garden City and Mi Vida CEO Chris Coulson told the Star.
Coulson encouraged property developers to grab the available opportunities to bridge the gap. He added that nodes such as Kilimani, Westlands, Parklands, Lavington, and Kileleshwa would continue to lose their attractiveness owing to supply concentration.
Predominantly rental markets in areas like Nairobi West, Roysambu and Ruaka will continue to grow to meet the increasing demand for middle-income housing.
Coulson called on the government to address certain issues currently affecting the real estate markets such as stalled projects as a result of delayed licensing processes by both county and national governments as well as poor financing structures with Kenyans unable to access mortgages.
“If we can get policies that can support mortgages then it will be good for developers because the demand is there,” he said.
Most Kenyans don’t have the confidence to get mortgages for purchasing new homes due to the high-interest rates and uncertainties.