Kisumu real estate business down as pandemic bites
Real estate business in Kisumu town is reeling from the devastating effects of coronavirus, with a major slowdown being experienced in activities.
A spot check by Boma established that entrepreneurs are contemplating new strategies to adjust to circumstances arising from the effects of Covid-19.
Some dealers are considering stopping all operations and laying off employees.
Skylark Construction Limited Company director, Vinod Patel, says activities are at a standstill as a result of reduced cashflow.
He attributes the slowdown to the ripple effects of the deadly virus on the economy.
“Money circulation is just a trickle due to the ravaging effects of the epidemic on the local economy, yet cashflow is crucial to spurring growth in the construction and real estate industry,” he says.
The businessman predicts price increases of construction materials in the coming days particularly as no new supplies are forthcoming following cancellation by shipping lines.
“Warehouses are running out of stock since about 60 per cent of the building materials are imported,” he says.
Opande Africa Investment Limited’s managing director, Nickson Opande, says there is a drastic drop in clientele base for property buyers in the town as the country grapples with the epidemic.
“The buyers’ market is non-existent for now. Majority of developers are stuck with their properties, which were earmarked for sale,” he says.
Opande regrets that the slowdown has come just few months when the sector was gradually picking up from the fall-out of the 2017 political hostilities.
“Worse, the virus has struck when the national economy was already in a slowdown,” he says.
Closure of government services such as the Lands registry and courts has also compounded business woes in the sector, halting key operations.
Opande recommends periodical opening of the lands offices to facilitate minimal property transactions.
Patel warns that if the pandemic is not contained soon, all construction-related businesses will be forced to scale-down operations and reduce the workforce in a bid to cut costs.
“We are monitoring the outcome of the prevailing situation for the next two to three months,” he adds.
He recommends that the county and national governments suspend taxes for the sector to cushion proprietors.
He also proposes that banks defer loan repayment periods and waive interests on loans for developers who took credit as business continue to shrink due to the Covid-19 pandemic.
“Banks should exercise leniency on property developers by considering deferment of loan repayment period for two to three months,” says Patel.