Review of 2017 Construction and Real Estate industry, Kenya. What to expect in 2018.
2017 Construction industry in Kenya has been characterized by increased cost of construction in several segments such as labour, timber products, imported fittings.
Cement.
Cement and steel prices have remained stable throughout the year with no significant change. This is due to competition, with many new cement companies coming into direct competition. Savannah Cement has remained the most promising new entrant, eating into the existing market dominated by Bamburi and East African portland cement due to its superior quality and low prices.
Steel.
The banning of twisted reinforcement steel bars to be replaced with ribbed bars has also opened up new players into the steel market, bringing in much needed competition, with the dominant import source od origin,India, facing stiff competition from China as a new entrant as supplier of the raw material needed for smelting into steel products in Kenya.
New Building technology.
The last 3 years , there has been alot of influx of new prefabricated buildings manufacturers into the Kenyan market. This product has been marketed as low cost, pulling in alot of customers who are trying to look for solutions towards high cost of living. The reality is that these cost more or less the same as traditional stone houses, and after the 3 years, we have seen customers realizing that the savings is negligible, and we have witnessed in 2017, most of the prefabricated housing suppliers have now resulted into selling the prefabricated wall panels as opposed to offering the complete house as a product. The market for this is available since there are many people needing the panels for rapid housing in areas where permanent building is not possible eg on leased lands or in remote parts of the country.
New building material types are beginning to be more common place. pvc vinyl flooring , gypsum ceilings, aluminium windows and bituminous membrane roof covers are slowly begining to take their share of the market , edging out traditional building materials.
Earthbag building technology has also entered the market, with a few projects in Athi river and Nakuru.
https://orkidstudio.org/projects/nakuru-childrens-home/6/
2018 Projections.
The capping of the interest rate at 14% will most likely be removed, and thereafter , banks will resume lending for construction purposes. This will result in a vibrant busy construction environment throughout 2018, especially now that the elections are done and dusted until 2022.
Demand for land round Nairobi city will continue to increase as foreign investors come in to buy land and construct. Joint Venture methods of financing will become mainstream ad the preferred mode of financing high rise real estate.
In architectural designs, a more modern minimalistic style look is becoming more preferred by house owners.
New materials such as manufactured marble slate stones will become more common place in the market. Stone art shops will also increase in number from the current less than 5 as developers realise they need to be competitive to attract clientele to their developments for rent or sale.
Architect Francis Gichuhi Kamau.
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