After a dismal year, Kisumu hopes for a brighter 2020
Real estate sector players in Kisumu have termed 2019 as a rough period for the entire sector, while exuding confidence the industry would perform better in the months to come.
Pabari Enterprises Ltd —dealers in construction and building materials— director Jiten Pabari says the property market in the lakeside town experienced a slow down for the better part of 2019, but there is high expectation of a turnaround this year.
“This sector suffers high costs of operation, lack of goodwill and support from the Kisumu county government. The prior year was considerably tough for us,” he says.
The proprietor urges the county government to engage property stakeholders with a view to formulating strategies to develop the building and construction industry.
He says there is a need to set up new industries in the town, a move likely to significantly spur property growth by luring more developers. “Kisumu needs to be a bigger hub for investment. Many investors will be attracted to put up properties with more factories,” says Pabari.
Bedvin Investments managing partner Benard Odhiambo concurrs, saying the real estate sector was stagnant in 2019 due to the damaging effects of a shaky economy. “Last year was a buyers’ market for investors because of the tough economic conditions and the ripple effects of the interest rates caps. The year also faced a bit of political uncertainties, with most investors taking a wait-and-see approach,” he adds.
However, he remains hopeful the new year will unlock good fortunes for the sector. “We expect people to be more open to investment given the more relaxed political situation in the country,” he says.
The property agent foresees a market where the property prices to remain constant or increase slightly this year. “We expect the house prices to remain fixed. Most properties are appreciating in value and we are not going to see it reduce any soon,” he says.
Odhiambo decries poor land administration, land fraudsters, delayed construction approvals by the county government and the ongoing economic slowdown as major challenges to the sector in the region.
Other challenges he cites include tedious procedures in the transfer of property and the recent demolition of business premises in the town to pave way for port expansion. Further, land remains a controversial issue in Kisumu with cases of forged titles deeds, lack of clear land tenure and grabbing highly affecting the sector’s investments.
“There is poor land administration right from registration of mutations to shady lands board consents and facilitation of title registration by people not employed by the lands ministry,” he says.
Kisumu County Physical Planning, Housing and Urban Development executive Dixon Obungu blames poor planning by the defunct local council for the high level of illegal buildings in the town.
However, new designs of Kisumu town are expected to be a boost the property sector by ensuring proper planning, particularly for new developments.
“Several structures were irregularly set up in Kisumu because of poor planning. Reshaping the town plan will largely improve and market its property sector,” says Obungu.
Recently, Kisumu city manager Doris Ombara also blamed ‘rogue’ planners’ for the initially poorly planned town, a situation that has seen irregular developments lately coming up in undesignated areas.
A Cytonn Real Estate 2018 survey report on Kisumu pointed out unstructured planning regulations as a leading factor hindering the sector’s growth.
The report said the town’s plans are based on the defunct Municipal Town Plan developed in 1974. It indicated the presence of little clarity on policies guiding the planning; which may lead to reduce land use.
Due to the poor planning, residential developments such as Milimani are close to the CBD and hence the city’s commercial hub cannot expand outwards. Sewerage connectivity is another major challenge.