Residential Projects

Nairobi Developers Build Sh80bn Homes in Tough Year

11,802 residential units valued at Sh80.4 billion were built in 2019.

Updated on

May 11, 2020

A gated estate in Runda, Nairobi. PHOTO/FILE

Nairobi builders completed 11,802 homes valued at Sh80.4 billion in 2019, confronting a tough year characterised by rising costs and shrinking credit access to the private sector.

According to the Economic Survey 2020, which was released on April 28, the number of private residential units completed last year was 9.4 per cent higher than the 10,785 units realised in 2018 as builders intensified efforts to meet the demand for housing in the city.

During the period under review, the number of completed private non-residential buildings stood at 2,174 units valued at Sh13.6 billion up from 1,940 valued at Sh12.4 billion in 2018.

“Value of completed private residential buildings rose from Sh77.7 billion in 2018 to Sh80.4 billion last year with non-residential buildings growing by Sh1.2 billion to Sh13.6 billion last year,” the report stated.

This happened at a time when the cost of materials for residential buildings rose 6.5 per cent compared with 3.3 per cent in 2018 – with labour costs rising 4.5 per cent after a 5.3 per cent increase in 2018.

Loans and advances from commercial banks to the construction industry rose 1.6 per cent to Sh115.8 billion from Sh114.0 billion in 2018, despite the cost escalation, suggesting dwindling credit to builders.

In 2019, the value of public buildings completed stood at Sh1.50 billion (530 units), a 2.4 per cent decline, compared with the Sh1.54 billion (430 units) realised in 2018.

The value of the buildings declined even as the number of units went up 23 per cent as the government intensified efforts to complete homes under the affordable housing scheme.

Meanwhile, the value of approved private building plans dropped to Sh207 billion last year from Sh210 billion in 2018 due to the suspension of the county’s technical planning committee and a lengthy downtime of the automated construction permit management system in the second half of the year.

The e-permit system that was developed in 2011 to enhance efficiency and accountability in the processing of construction permits has been operating erratically since July 1.