HomeBlogsWhy low cost housing is the future of real estate investment

Stagnation of the high value property market has led to a strategic shift to low cost housing development, as there’s need to satisfy housing needs of the rapidly growing population. In light of this, the government has offered incentives to property developers in the 2017/2018 budget to those who construct at least 1,000 low-cost units would be eligible for a tax break and would pay corporate tax at a rate of 20 per cent.

The lower-income housing segment is thus the next investment frontier for the real estate sector as developers embrace it and the market gets enlightened on the available products in the market through increased advertisements and events like expos.

The last five years has witnessed healthy competition among market players as they get to employ new innovations and trends such as use of alternative building materials such as prefabs.

Prefabs are specialist dwelling types of buildings made off-site in advance, usually in standard sections that can be easily shipped and assembled.

According to the Kenya Banker’s report, middle income apartments still have the largest share of market transactions at 58.6 per cent, while maisonettes and bungalows account for 24.3 per cent and 17.1 per cent of total sales respectively. They also had the largest number of transactions in lower and middle income markets.