Data from the Kenya National Bureau of Statistics showed that the value of buildings approved for construction in Nairobi County rose by 20.45 percent in the first half of the year to Sh98.8 billion, thanks to a raft of newly scheduled projects.
Figures show that the value of buildings approved for construction in the capital rose from Sh82.02 billion in the first six months of 2023.
In the first half of 2024, June recorded the highest number of approvals at Sh25.1 billion, ahead of Sh20.1 billion in May.
March recorded the lowest approvals at Sh12.1 billion and Sh12.5 billion in January.
“The leap to 2024 is a more advanced planning approach in preparation for future developments,” said Mr. Samuel Kariuki, CEO of Mi Vida Homes.
“The process, which involves getting the National Project Management Authority’s approval of documents, two architectural and structural approvals from the city council and the National Building Authority, can take a long time and developers want to get that done which is why approvals have been high this half of the year.”
Mr. Kariuki said that due to the government’s plan to provide affordable housing, developers are in line with this vision to meet the demand for housing.
The value of approvals of Sh98.7 billion in the first half of the year recorded a recovery in the second quarter of the year compared to a 31.2 percent decline in the first quarter which was impacted by expensive capital and delays in licensing.
The value of approved buildings in the capital fell from Sh56.7 billion in the first quarter of 2023 to Sh39 billion in the corresponding quarter in 2024, but rose to Sh98.7 billion at the end of June.
The decline was attributed to higher capital costs and delays in issuing building permits following floods in April.
Nairobi Governor Johnson Sakaja has suspended approvals for construction and excavation projects, saying rainfall levels were too high and blaming encroachment on the Rebas River for the floods. He has also ordered an audit of all buildings constructed in the city over the past two years.
The Architectural Association of Kenya (AAK) says there were no clear guidelines on approvals, prompting developers to back off from proceeding with construction.
“The delay in obtaining approvals of up to more than a year resulted in losses as the project could not start on time,” said Florence, president of the American Society of Architects.
The rapid depreciation of the Kenyan Shilling against the US Dollar played a pivotal role in the cost of construction supplies during the period under review.
Cement consumption in the first quarter of the year decreased to 1.9 million tons compared to 2.2 million tons in the same period last year, while the quantities produced decreased from 2.3 million tons to 2.1 million tons in the comparative period.
Kenya imports most of its construction materials such as steel, cement clinker, fuel, machinery and equipment, and the weak shilling makes these imports more expensive.
“Political instability has also contributed to investors looking for investments that can easily recover their money, the cost of financing is very high and the return on investments has been affected,” said Diana Musyoka, honorary registrar of AAK.
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