Ongoing works at the Business Transformation Project that will entail convergence of all Standard Group newsroom operations across all platforms. It will involve the convergence of the commercial functions, the creation of a new organisational structure to reflect the new functions, processes and roles, change of titles, and appropriate alignment of support departments. Picture taken on Wednesday Sept 8, 2020. [Jonah Onyango, Standard] The value of approved building plans has fallen to the lowest level in the last three years, a new report shows.
According to the Financial Sector Stability (FSR) Report, 2020 released by Central Bank of Kenya (CBK) last week, approved actual building plans fell to Sh2.33 billion between January 2019 to June 2020 compared to Sh2.45 billion in 2018 and Sh2.81 billion in 2017.
This was despite an increase in the value of approved plans to Sh1 billion in the first two months of this year on the back of the government’s affordable housing initiative, and the repeal of the interest rate cap last November. Read More
The drop came amid a subdued real estate sector in the last year that has now been worsened by the Covid-19 pandemic.
“The demand for property was subdued due to slow economic growth, especially for middle and high-income earners,” said the FSR.
The report, produced by CBK in collaboration with the other financial sector regulators, assessed the global and domestic macro-financial developments and risks to the Kenyan economy and on the stability of the financial sector.
It also cited the Hass Consult Limited All Types Property Index, which showed that property prices fell by 3.5 per cent and 1.2 per cent for selling and rental prices in 2019 compared to 1.9 per cent and 1.6 per cent increase in 2018, respectively.
Financing
“The supply and uptake of property have been affected in the past by slow economic growth, general election uncertainties, banking industry instability and interest rate controls that constrained lending to real estate sector,” the CBK report said.
In terms of real estate financing, credit from banks to the real estate sector grew by 3.8 per cent in 2019 to Sh395.18 billion.
Credit to the sector by pension funds grew at the same rate of 3.8 per cent to Sh238.65 billion.The FSR warned that pension schemes and fund managers who have invested in buildings and land face liquidity risks and delays in settling member benefits owing to the slowdown in the property market.Insurance contributed Sh84.07 […]
