Lolwe Estate in Kisumu. The fresh injection of real-estate capital in the region has come as a blessing for the city’s growing population thirsting for affordable housing. Photo/Jacob Owiti

Lolwe Estate in Kisumu. The fresh injection of real-estate capital in the region has come as a blessing for the city’s growing population thirsting for affordable housing. Photo/Jacob Owiti


Driving into Kisumu town, opposite the Kisumu-Kakamega highway stands rows upon rows of high-rise flats and mansionettes and others are under construction.

This 10 kilometre stretch into the city is one of the view points of the lake side city which just three years ago was dominated by shrub land and isolated shanty homesteads.

But now, the town is experiencing a construction boom with property prices rising by more than 500 per cent in some areas and real estate agents and developers reaping massive returns.

Mr Habil Odhiambo, one of the directors of Kisumu Property Market Ltd, says Kisumu’s property boom is typical to the trend in major urban centres in the country.

“In 2008, half an acre plot in Nyamasaria about five kilometres from the city centre used to be sold at Sh100,000. Now the same piece of land goes for Sh700,000,” he said.

“In Kibos, about 10kms from the city centre, an acre cost Sh350,000 in 2008. The same piece of land now goes for Sh900,000.”

Areas further from the city centre which were empty shrub lands several years ago are now dotted with gated communities with most of the rental units being fully-booked even before completion.

The fresh injection of real-estate capital in the region has come as a blessing for the city’s growing population thirsting for affordable housing.

According to the 2012 Economic Survey, loans and advances towards the building and construction sector by commercial banks in the country increased by 55.8 per cent from Sh32.6 billion in 2010, to Sh50.8 billion in 2011.

The total value of private building works completed in the country increased from Sh38.3 billion in 2010 to Sh43.1 billion in 2011.

These are the billions of shillings being channelled towards houses in Kisumu as investors who had previously shied away from the lakeside region, perceived to be a preserve of Asian barons and lacking in infrastructure, warm up to the area.

Things are, however, beginning to change and as the region recovers from the effects of the 2007/2008 post-election chaos, things couldn’t be better for the property market.

The infrastructure development over the past few years has also meant increased confidence both for individual and institutional investors.

Major highways and feeder roads across the Nyanza region have undergone multi-billion upgrading and expansion, opening up the city.

The upgrading of Kisumu Airport has further seen property investors make a beeline into the lakeside city, in a move that has seen an unprecedented rise in the value of land and housing units.

However, the rapid urbanisation does not come as good news to everyone in the town.

The quest for more land to develop has led to a widening of the urban boundaries of the city with temporary houses that were the norm in peri-urban parts of Nyalenda and Manyatta going down and permanent houses and commercial units rising up in their place.

This has meant the displacement of poor families that have been living in these areas for more than three decades.

As a result, informal settlements have mushroomed around parts of Obunga, Manyatta and Nyalenda and the population of slum inhabitants keeps on increasing.

With increasing unemployment and poverty in slum areas, crime in most Kisumu city estates has become a new nightmare.

Residents and security officials point a finger of blame to unemployed slum youth who have become more daring and ruthless in their exploits.

The residents are now challenging the city planners to ensure that the fast rate of urbanisation keeps in mind pertinent issues like proper land use and does not alienate the urban poor.

Ms Nishma Sedani, the proprietor of the Lake Estate Agency, a new property firm in the city, says that one of the concepts that is maximising on land use is the apartment concept.

“The apartment concept that is common in Nairobi is gaining ground here in Kisumu and many people now understand that they do not have to be land owners to be home owners,” she says.

“Middle income earners with a steady income can purchase space above someone else’s house and have a home.”

This is evident from the number of apartment complexes currently under construction in various estates around Kisumu.

Home ownership

Translakes Limited, Kogelo Estates and Diana Apartments are some of the multi-million shilling apartment complexes being developed within Kisumu.

However, home ownership still remains far beyond the reach of many.

Many medium income earners are thus striving to look for various financing vehicles to realise their homeownership dream.

However, several stumbling blocks make the process cumbersome and nearly impossible.

According to Robert Bomet, mortgages manager at Kenya Commercial Bank, Kisumu, there has been an increase in application for construction loans.

“A lot of people are coming to us to obtain financing for building houses”.

“The problem, however, is that most of the people do not have security for the loans they are applying for. Most of the land around Kisumu is ancestral land and the owners do not have title deeds.

“What most land owners get when they buy the land are allotment letters which cannot be used as security. The municipal council should fast-track the exchange of allotment letters for title deeds to enable more people access credit.”

At the ground-breaking ceremony of Kajulu Estates, the latest gated housing estate in Kisumu’s Mambo Leo Estate, Housing Finance’s managing director Mr Frank Ireri expressed concern at the lengthy and complicated legislation governing land transfer.

“The approval procedures for subdivision of land are still lengthy and complicated as there are too many statutes which control and regulate subdivision and change of use,” he said.

In addition to this, Mr Ireri said that the government needs to address the outdated planning standards for towns and cities to ensure growth in the sector.

“The key to effective land use planning requires robust institutional capacity and governance structures for speedy implementation and enforcement of approved plans, policies and strategies,” he said.

“Also, the transfer, documentation, processing fees and stamp duty rates are far beyond the reach of the majority of Kenyans.”

“We need to move away from the traditional settings. When you look at Nairobi, for example, people are now moving towards Thika, Limuru and Athi River,” said Mr Ireri.

“When you put up roads, sewers, and power lines then people can move out of urban centres and this will go a long way in addressing the current housing shortfall through opening up more land for development,” he said.