Rising Interest Rates to Send House Prices Through the Roof
The current shortfall in low-cost housing is likely to get worse unless alternative financing models are found in the wake of rising loan interest rates.
As mortgages go beyond the reach of many middle and lower class Kenyans, experts say the solution lies in cheaper sources of lending and use of alternative building materials.
"The government tried to engage banks to bring interest rates to single-digit levels, but the contrary is now the case. Developers of low-cost houses need incentives such as lower taxes and a fund from which they can borrow at lower interest rates. The government can also provide land and, through public-private partnerships, start housing schemes," says Mr Daniel Ojijo, chairman of Universal Homes.