12 December 2012

Kenya: Home Builder Finds a Way to Keep Entry Prices Affordable

A home builder in Athi River has introduced a new house type aimed at helping first-time buyers leap on the property ladder at a relatively affordable entry price.

The developer, Superior Homes Ltd, is selling 'quarter villas' at Greenpark estate on Mombasa Road, which are modelled after apartments, only there are four houses per block sitting on slightly more than a quarter acre.

A major reason for introducing the new concept into the Kenyan market, according to managing director Ian Henderson, is to keep the entry price low - below Sh8 million - amid rising home and land prices in Nairobi and the outskirts. The three-bedroom houses are on sale for Sh7.8 million each.

"We introduced this recently... it's a large villa divided into four. For a price of an apartment, you get a house on Mombasa Road with your own garden!" said Henderson.

The developer has put up 20 units of quarter villas and 12 are already sold off. Each owner of a quarter villa has access to a garden behind the villa block at the equivalent price of an apartment.

The units were offloaded into the market about six months ago when the cost of financing had peaked. Henderson said he expects the house type to tick with first-time buyers as the cost of borrowing reduces, since quarter villas offer more than apartments at the same price.

Construction of Greenpark estate, a gated community, started in 2006. The entire development sits on 152 acres and is set for completion in 2016. It estimated to be valued at over Sh6 billion by time of completion.

The first cluster of houses - 184 units of maisonettes, bungalows and super-bungalows - is complete and sold out. The second cluster of 62 units is almost complete, with 57 units already sold. Cluster three will have 150 units.

Pioneer home buyers have seen property values jump almost five-fold from Sh4 million for a three-bedroom bungalow in 2006 to resale prices of Sh14.5 million currently.

"The cost of land and construction materials was low then. The pioneers were risk-takers who believed in the development and the promoter despite us being the ground-breakers in this area," said Henderson.

He said there are now about 38 gated community developments between Greenpark and the JKIA stretch. The scot said he has set aside 25 acres for a five-star hotel and 15 acres for a shopping mall.

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