Genghis Capital & Paradigm Projects Unveils ‘Rent-to-Own’ Home Solution To Increase Home Ownership in Kenya

Kenyan-Collective-Genghis-Capital-Paradigm-Property-Home-Ownership
L-R Andrew Saisi- MD National Housing Corporation and Geoffrey Gangla CEO Genghis Capital

Home ownership in Kenya has become a key element in our mindsets. In the recently launched Knight Frank Wealth report, Kenya is among the top-five favorite property investment locations for Africa’s super rich but sky-high prices in land purchasing and already built property and slow product market uptake has rendered a very high percentage of Kenyans property owners

Pricing, location, speculative land dealers, delays and regulatory difficulties, a capitalistic economy and minimal value of the property ranks as the most crucial reasons as to why most Kenyans don’t own their own homes – even with the aid of mortgage loans.

One of the areas that has shown to have profound impact is increasing access to high quality affordable housing. We have gotten to the point where it is time for real estate investors and developers need to catalyse and support affordable housing across emerging markets to avoid deepening the housing crisis.

This morning, Genghis Capital, an investment bank, and Paradigm Projects, a real estate development advisor, unveiled an affordable home ownership solution known as HOME (Home Ownership Made Easy).

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L-R Austin Ogada- Director Paradigm projects, Dan Awendo- MD Home Afrika, Andrew Saisi- MD National Housing Corporation, Geoffrey Gangla- CEO Genghis Capital Limited

HOME will allow Home buyers to obtain a long-term purchasing facility from the developer at favourable credit terms, with monthly repayments priced at equal or close to prevailing rental rates in the target areas.

Speaking during the launch of HOME, at a property investors forum organized by Genghis Capital and Paradigm Projects, Austin Ogada, director Paradigm Projects, said:
“Majority of developers are unable to exit from their projects due to unaffordability of houses since they are usually not able to attract both equity and debt capital for funding of their projects. HOME will allow long-term investors to fully underwrite a real estate project thereby significantly de-risking the project for the sake of the equity and debt investors as well as providing an alternative financing platform for the eventual home buyers to enable them purchase the properties being developed.”

Mr. Ogada said the targeted developments will kick off from July in the Southern suburbs of Nairobi like Dagoretti, Uthiru, Kikuyu and Ngong Rd.

Kenyan-Collective-Genghis-Capital-Paradigm-Property-Home-Ownership
L-R Andrew Saisi- MD National Housing Corporation and Geoffrey Gangla CEO Genghis Capital

Speaking at the same event, Genghis Capital CEO, Geoffrey Gangla, said that property ownership is part of an eco-system that requires investors and developers to be innovative in enabling home owners purchase properties at reasonably affordable rates.
“Majority of people seeking home ownership do not have enough money to make an outright purchase or the down payment required which are usually steep. HOME is an innovative solution that addresses the interdependency between developers, investors and buyers allowing more people affordable home ownership.”

Due to the unattractiveness of mortgage products, home ownership in Kenya remains very low with the Central Bank of Kenya estimating there are just 25,000 of home loans in the entire country with a population of 44.3 million.

In addition, the average house prices in Kenya recorded a minimal increase of 0.98 per cent in the first quarter of 2018 compared to the 1.10 per cent rise in quarter one 2017, according to the Kenya Bankers Association’s Housing Price Index. This was the slowest price increase since the third quarter of 2016.

While the index depicts a sense of overall price stability, the trend over the past four quarters points to the underlying demand and supply characteristics. The slowdown in the rate of house price growth illustrates a demand slowdown on the back of the broader economic environment characterized by a general sense of slow growth.

According to Austin, HOME will provide potential home buyers a well-structured home purchase mechanism that is affordable, flexible and easy to use.

“HOME targets to offer ownership for the lower middle-income market segments in areas presenting suitable neighborhoods for the development of gated residential housing projects.

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