Housing demand in East Africa hits five million units

Uganda, Tanzania, Kenya and Rwanda will need to construct new houses as their total population approaches 125 million. With a population of 45 million people, Tanzania has the highest annual demand standing at around three million new units.

Urban demand of 200,000 new units has made Kenya the focal point of developers and a diaspora of cash in the last 10 years. The National Housing Corporation, the Kenyan government body, has said that annual supply of new homes is around 36,000 annually.

With its 10 million-strong population, Rwanda requires 20,000 new units to cater for the rising demand, while a further 1.6 million houses are needed in Uganda.

Housing demand in the region is exacerbated by rising urbanisation across East African states. The State of East Africa report 2012 titled Deepening Integration, Intensifying Challenges notes that East African cities will be among the fastest growing cities in the world by 2025 due to rapidly increasing populations.

Kampala has been projected to lead the pack by 99.5 per cent population growth, followed by Dar es Salaam by 85.2 per cent, Kigali by 79.9 per cent, and Mombasa and Nairobi by 79 per cent and 77.3 per cent respectively.

Tanzania is leading in the pace of urbanisation with 26 per cent of its population living in urban areas in 2010 – up from 19 per cent in 1990.

In Rwanda, the rate of urbanisation jumped from 5 per cent in 1990 to 19 per cent in 2010.

Kenya’s urbanisation rate grew from 18 per cent in 1990 to 22 per cent in 2010 and Uganda followed suit by growing from 11 per cent in 1990 to 13 per cent in 2010.

In the East African region, satellite cities in five cities have been proposed by the study to curb the challenges of urbanisation.

The new cities include Kigamboni in Dar es Salaam, Tatu City and Konza Technology City on the outskirts of Nairobi, Kalungulu in Kampala and outside East Africa in the Democratic Republic of Congo is La Cite du Fleuve.

To cater for the rising demand in houses, governments and the private sector have invested heavily in high-, medium- and low-cost housing.

In the region, mortgage companies, banks and microcredit organisations are working closely with individuals and employers in house development.

“Whereas shelter is so basic, it is unfortunate that billions of people around the world cannot afford it, yet they need it like any of us,” noted Equity Bank chief executive officer Dr James Mwangi, one of the East African banks providing financing to help people acquire sound housing.

“By its very nature housing represents a major investment requiring substantive capital outlay simply because of technology and materials we have used in the past,” he remarked.

In Kenya, microcredit organisation Jamii Bora has perfected the art of constructing low-cost houses, affordable to many low-income people.

With two or three bedroom houses costing just KES 1.4 million (US$16,736) to KES 5 million (US$59,772), Jamii Bora has allowed its members to buy their houses in low-payment modules, allowing thousands of former slum inhabitants in Nairobi to own houses.