Government told to inject Sh50b into housing sector
The government has been asked to set aside at least Sh50 billion to breathe life into the housing sector following depressed activity over the past three months.
Institute of Budget and Devolution director Elis Mbau, said the country’s projected economic growth rate falls short of what the organisation considers to be ideal (6 per cent) for sustained demand, good cash flow and less pressure on credit markets.
Property developers, buyers and sellers have taken a hit on cash flows following the coronavirus outbreak, a situation that will make it hard for the sector to resume full recovery.
The institute proposes the establishment of a revolving fund over the next two financial years to give zero-rated interest to housing co-operatives and provide heavy tax subsidies for the private sector if the government is to realise the affordable housing agenda by 2022.
Mbau said the government’s affordable housing agenda was a noble initiative that should not be subject to restricted time frames due to the influence of unforeseen circumstances like coronavirus (Covid-19).
Over the past few weeks, some experts have warned that the real estate sector could face a liquidity crisis if the government does not pump enough money into the economy.
The latest Banking Sector Report by Central Bank of Kenya shows that the real estate sector has received just a little over Sh3.6 billion funding relief from banks, a far cry from the institute’s estimate of Sh50 billion.
Meanwhile, Architectural Association of Kenya (AAK) has proposed that private and public buildings should be redesigned to accommodate the new operating realities presented by the pandemic in a bid to control the risk of infection.
AAK president Mugure Njendu said offices are expected to witness more spaced-out desks, the establishment of entry and exit points to deter regular interactions.
Hands-free facilities from doors, water tap, soap dispensers and elevator buttons will become the norm, he added.