Understanding Home Ownership in Kenya – Lessons From The Past

Understanding Home Ownership in Kenya - Lessons From The Past | home ownership 1 | Pinned Directory Kenya
Kibera Slums and Slum Upgrading Scheme in the Background

Looking everywhere, whether travelling in the Buses, SGR or Kenya Airways, from Nairobi-to-Mombasa, from Nairobi-to-Kisumu, Kisumu-to-Busia, Kisumu-to-Malaba, you see construction projects abandoned.  Some half-way, with just the fence, just the foundation, just the 1st/ground floor, just with the doors and windows, just abandoned, just incomplete. Incomplete project are not only a nightmare to the owners, but a scar on the construction-industry and professionals alike, who do want to associate or put such projects on their curriculum vitae.


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A typical abandon construction project, with tall grass and vegetation overgrowing the site and sometimes into the building

To try to understand the built-environment in Kenya today is to investigate these incomplete projects lying across the landscape. To try to comprehend the craze for land-ownership and home-building is in fact to demystify home-ownership.

Is it possible to build a house from savings?

The assumption made here is that resources set aside for property acquisition will come from personal savings on employment-income. First, let us consider setting up the building construction process into the following stages:

Building stages:

  1. Site preparation

    Understanding Home Ownership in Kenya - Lessons From The Past | construction stages | Pinned Directory Kenya
    A typical work program or schedule, showing the construction planning and schedule and management plan.
  2. Foundation and slab
  3. 1st floor wall
    1. 2nd floor slab
    2. 2nd floor walls
  4. Roof
  5. Building Close-In (Windows and Doors)
  6. Plumbing
  7. Electricals
  8. Interior and Exterior Finishes
  9. Landscaping
  10. Site-work finishes and parking

For the average estimate of a 3 bedroom house in Kenya, if we attribute each stage to take one month and cost about ksh 300,000 each and land to cost between 300,000/= to 600,000/=, then the total building cost would be somewhere within 3.3 million-to-3.6 million. But is it realistically feasible to save 300,000/= each month to finish each stage of construction?

Certainly it’s not a feasible option; you cannot save all that money and remain unused. Realistically, in life things come up here and there that need to be addressed. Therefore, it is important to run a monte-carlo analysis to investigate what are the other options to accomplish such a venture.

Cash Flow Analysis

The trend of expenditure on project as time progresses is referred to as a project cash flow analysis. In Kenya, this is one of the primary roles of the quantity surveyor; to control, monitor and manage cost and quality as the project gathers steam. Recently (2016), there was a law which was passed that demand that building projects in Kenya need to be completed within 5 years, otherwise, the validity of the construction permits and related documentation expires and needs to be re-submitted for evaluation again. But is it realistically possible to build a house in Kenya within 5 years based on your savings? That will be the basis of our investigation.


In Africa, time is elastic; you could expand or contract it. Africans call it “African time” and Kenyans call it “Kenyan time”. So what is the “Kenyan time” of 5 years? Would that mean 10 years, 15 years or even 20 years?

Calculation analysis.

In this analysis, let us assume the cost of a house is 3.45 million. Therefore, for a savings scheme or plan, a 5-year-plan would suggest that one needs to set aside at least 57,500/= from their monthly salary to meet the construction cost. A 10-year savings-plan would translate to a 28,750/= per month, and a 20-year savings-plan will require a 14,375/= monthly savings to the make the house a reality. Which, therefore, is the viable option?

Understanding Home Ownership in Kenya - Lessons From The Past | Kenya Interest Rate Central Bank of Kenya | Pinned Directory Kenya
Kenya Interest Rate History Issued by the Central Bank of Kenya

In case you are considering taking a mortgage, it would be good to know that loans and building mortgages are normally issued with capped interest rates over specified periods of time, normally in increments of 5 years, that is, a 5-year, 10-year, 15-year, 20-year, 25-year and 30-year mortgage plan.

Monthly Income and Savings Requirement

With an assumption that a working human being is able to save a maximum 20% of their income, then what would be the amount of monthly salary that one might need to bring home in order to meet the housing bill under each repayment plan? For the 5 year plan, the salary amount is 290,000/=, for the 10 year plan, the salary amount is 145,000/=, for the 15 year plan, the salary amount is 98,000/=, for the 20 year plan, the salary amount is 72,000/=, for the 30 year plan, the salary amount is 50,000/=. And what is the average Kenyan wage?

Understanding Home Ownership in Kenya - Lessons From The Past | home ownership 2 | Pinned Directory Kenya
This is a section of Kibera slums and the slum upgrading programing in the background. The cost of affordable housing has gone over the roof, leaving over 60% of Kenyan to seek shelter in informal settlements also known as slums, but for how long? Is this an indefinite situation?

Is it realistically possible to save money in a single account, without using it for divergent needs or unforeseen circumstances? For these reasons, the recommended minimum salary of 72,000/= per-month is possibly the most realistic minimum-income requirement for home-ownership in Kenya.

Going back to our building schedule plan, it means that a project can be done in Kenya over a period of 20 years to 10 years, that is, each stages stipulated above, would be done on annual basis rather than monthly basis. And this precisely is how people built their houses in Kenya a long time ago.

These are the lessons from the past; where parents, bought land, started laying the foundation, and when the children grew up, they in-turn fueled the construction process, with their contributions and participation, in their own little ways,  in completing the roofing, ceiling works, additions or remodeling, the landscaping, fencing, and other site works etc. Now that is Kenyan time captured in a generation or two decades moving forward and these are the lessons from the past as we continue looking into the future.


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