Construction costs increase in Nairobi, Kenya

Construction permit fees in Nairobi, Kenya, have increased by up to 1.25% of the cost of construction, placing a strain on the industry. An article in Nairobi News (Why building in Nairobi is costly by Allan Olingo, April 10, 2014) states that increased land rates and construction permits by Nairobi County last year is slowing down the pace of construction in the city.

A document by the Kenya Property Development Association (KPDA) and HassConsult, called The State of Development Report, reveals that increased levies are reducing the rate of development in the capital. The report indicates that the fees are not “investment friendly” and that they will affect the size and location of future properties – with developers now looking at land more than 50 kilometres from the city. This is because fees are based on overall construction costs – so to reduce construction costs and the subsequent fees, developers are looking for cheaper land. The cost of land – increasing by up to 1000% over 5 years – and its availability in Nairobi are the greatest concerns to developers and investors, but also is the problem of meeting current demand, especially for housing.

The report claims that the building permit fees are the highest in Africa.

http://nairobinews.nation.co.ke/why-building-in-nairobi-is-costly

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