Building approvals up during the first half of 2019
The value of approved buildings in the country increased by 20.3% during the first half of the year to 121.3 billion shillings from 100.8 billion shillings from a similar period last year.
According to the latest Kenya National Bureau of Statistics economic indicators report, the aggregate value of buildings approved as at June this year stood at 244.23 million shillings compared to an aggregate of 239.64 million shillings for the same period this year.
The increase is largely attributed to the launching of mass affordable housing projects in the past two years.
The report also points to the fact that consumption of cement dropped to 492,695 metric tons in August 2019 from 500,601 metric tons in July 2019, indicating a slowdown in real construction activity.
The drop has been attributed to reduced developer activity in sectors such as office and retail, government delays in processing building approval permits especially in 2019 as well as insufficient access to developer funding owing to a tough financial environment that has persisted for the past two years.
However, according to Cytonn Investment’s weekly report, with the repeal of the interest rate cap and the continued launch of mass affordable housing projects, this is projected to change.
With the government’s bid to fulfil its objective of 500,000 units by 2022, there will be more projects undertaken in 2020 and cement consumption is also set to pick up next year.