Survey: Many prefer building own homes to buying

Kenya: A majority of Kenyans aspiring to own a home say it will take them more than two years to realise their dream.

According to a housing survey released by Kenya Bankers Association (KBA) last week, 58 per cent of potential homeowners do not see themselves acquiring a home in the next two years, while 21 per cent of potential homeowners plan to acquire a home within the next one year, and the remaining 21 per cent in the next two years.

About 80 per cent of those planning to acquire a home in the next two years or less intend to build their own homes rather than buying.

They cite the high cost of buying a ready-made house as the main reason for going the self-build route.

The report indicates that 54 per cent of the current homeowners used personal savings to acquire homes either by building or buying. This is almost the same case with aspiring homeowners as some 49 per cent of them are not planning to borrow from any source to build.

They are intending to use their personal savings and periodic incomes to build.

However, more aspiring homeowners (36 per cent) than current homeowners (19 per cent) are actually planning to borrow to build.

They are attracted to a home loan or a normal personal loan to acquire a home.

Mortgage popular

Also, for this group, mortgage financing seems to be a little more popular as 20 per cent of them compared to six per cent of current homeowners would want to acquire a home through a mortgage.

Over half of aspiring homeowners may want to use some bank financing, which is higher than the 28 per cent bank involvement for current homeowners.

“The slightly higher appetite for bank-related home financing for the aspiring homeowners may be due to a more financially literate group,” says the report.

“In the recent years, there has been a lot of communication from the banks on mortgages. Also, there have been several homeownership promotion events across key urban areas in which banks are key participants.”

Jared Osoro, KBA’s director of research on financial markets and policy, said during the launch that most Kenyans have a feeling that things are going to get better and the first thing they are thinking of is owning a house.

However, he said, many middle-class and low-income earners think they cannot own a home because the houses are too expensive.

During the event, KBA also launched a quarterly housing price index that will be used to track changes in house prices.