Modern high-end buildings are cropping up all over Kisumu, on the other hand there is a shortage of affordable housing.
What does the future hold?
Real estate dealers in Kisumu are optimistic about the government’s proposed Big Four Agenda, hoping that the housing project will address shortages of low-cost houses in the town.
The sector players who spoke to Boma say a combined effort from private developers and the government is needed in order to meet the rising demand for affordable houses in the lakeside city.
Nickson Opande, Managing director, Opande Africa Investment Limited says developers have welcomed the housing initiative and are ready to support the government in the realisation of the objective.
Shortage of affordable housing
According to Opande, Kisumu town has lately experienced notable high-end development, but there is little going on to take care of the low-income earners.
Consequently, he challenges developers within the town to shift their focus and undertake affordable housing projects to supplement what the government intends to do.
The opulent estates such as Milimani, Migosi, Lolwe, Tom Mboya and Riat are mainly crammed with middle and high-class residential apartments.
“We are receiving a lot of inquiries on affordable houses, which is a clear indication that we need to double efforts in coming up with such projects,” says Opande.
“Developers should go for real-time projects on low-cost housing because there is a considerable demand in this area,” he adds.
Ounga Commercial Agencies Director, Eric Ounga, concurs, pointing out that with a population of over one million people, Kisumu has a huge deficit of affordable housing requiring on average 25,000 units every year.
Ounga says there is a serious need for more affordable houses in the lakeside town to cater for the rising housing demand.
“The shortage of low-cost housing is a real challenge and we must rededicate our efforts towards addressing it,” he says, adding that as part of realising the dream, his agency in partnership with other developers plans to embark on low-cost housing projects.
He stated that though the government’s agenda for affordable housing was well thought out, it may not fully meet the demand for such houses in Kisumu hence the need for devoted efforts by the investors.
“What the government plans to provide in terms of affordable housing is inadequate to satisfy the existing market. We (developers) must reinvent strategies to bridge the gap,” explains Ounga.
He cites old municipal residential estates within Kisumu town such as Ondiek, Makasembo, Arina and Nubian as areas where affordable houses could be put up due to proximity to the CBD.
Consequently, he says the government must also bring on board private developers to convincingly realise the objective of the affordable housing initiative.
Low-cost housing is one of President Uhuru Kenyatta’s Big Four agendas. Under the project, the government targets to build at least one million affordable houses across the country by 2022.
In the proposal, Kisumu is expected to benefit from the construction of 2,000 new affordable housing units.
Cooperating in construction
Already some counties in Nyanza region are trying to align their development goals to suit the government’s Big Four Agenda for economic development, comprising the provision of the affordable homes.
Kisumu and Homa Bay counties for example, recently signed a Memorandum of Understanding (MOU) with the National Government to construct 2,000 affordable houses.
The agreement was reached between Governors Cyprian Awiti (Homa Bay) and Anyang’ Nyong’o (Kisumu) and Housing and Urban Development Principal Secretary Charles Mwaura.
Kisumu boasts of a fast-growing real estate sector with vast developments coming up recently, especially in the outskirts of the CBD.
Among the areas occupied with new developments are Riat hills, Kanyakwar residential area, Mamboleo, and Milimani.
As a result, investors have moved in to reap from the lucrative growth taking shape on the town’s outskirts.
According to a 2016 survey report by Cytonn Real Estate on Kisumu City dubbed Cytonn Retail and Mortgage Affordability Index, the residential real estate sector in Kisumu presents investors with a total return of 13.3 per cent per annum, with an income yield of 4.8 per cent and an annual capital appreciation of 8.5 per cent.
The report, which highlights the most affordable location for a household to purchase a home given one’s income level, says that Kisumu’s residential sector is undergoing rapid development, with most of the mega developments, being less than five years old.
This growth has been largely propelled by government decentralisation, urbanisation, and the increase of the middle-class population.
Kisumu in 2017 registered a 12.74 per cent year-on-year growth rate, with an acre selling at Sh6.97 million, up from Sh3.8 million in 2012.