How the government intends to improve the Kenya real estate industry
The Kenyan economy has, over the past decade experienced a significant growth in most key areas. This has been attributed to a vibrant private sector and the ever increasing appetite of foreign investors in Kenya. The Kenyan government in response to this has invested heavily in infrastructure development. In addition, the government has taken steps to improve the legal and regulatory framework in key sectors of the economy like the Kenya real estate.
The government provides Kenya real estate companies with mortgage financing which enables them to acquire property and pay later in installments. The government intends to continue developing housing finance, as well as to provide the legal framework aimed at promoting further housing development. In the quest to provide affordable shelter for everyone, there are many construction projects which need investment hence the much needed co operation between the government and the real estate sector.
The government intends to introduce a framework for Real Estate Investment Trusts (REITs), which is a regulated investment vehicle which enables collective investment in real estate. REITs are meant to increase public participation in the Nairobi Stock Exchange and thereby provide large sums of capital for real estate projects.
Enhancing security levels within the Country is another way through which the government attempts to support the real estate sector. Investors, especially foreign investors tend to pull back when they discover that the area in which they intend to put an investment is insecure. The security, which is the mandate of the government, therefore comes as a boost to the development of Kenya real estate.
There is a government proposal that seeks to put the lending rates by banks at a fixed rate (9%) Which when passed will see accessing loans become much easier. This is intended to encourage more investors to seek loans for real estate development. This is bound to greatly boost the real estate sector because at an interest of 9%, the loan is easier to repay and more people will in turn channel their investments towards the real estate sector.
In Kenya, even foreigners can own land, though on a leasehold tenure. This move by the government is meant to attract very many foreign investors with a high appetite for big time investments into the Country. The influx of foreign investors into the Kenya real estate has greatly boosted the sector and in turn earned the government lots of revenue in tax collection. Some foreign investors eventually settle into the Country permanently and open businesses which provide revenue to the government and provide employment opportunities for majority of citizens, whose salaries also are taxed by the government equating to more revenue.
The government’s attempt on cutting down the cost of essential products is expected to extend to building materials. This is aimed at encouraging more people to invest in the Kenya real estate sector which is turning out to be a key sector in the development of the Kenyan economy.
Go to www.westkenyarealestate.com for more information on the real estate sector in Kenya.