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BY CORRESPONDENT,NAIROBI,11TH JUNE,2020-As the government prepares to read the Budget for fiscal year 2020-2021, Real estate players are very optimistic that favourable measures will be instituted to spur growth in the country’s real estate sector.
A special consideration should be given to incentivise the sector to attract foreign direct investments, reduce housing deficit and support job creation to enhance the sector’s contribution to economic growth during and post the COVID-19 pandemic.
Therefore, the fiscal year 2020-2021 Budget measures for the real estate sector should lay strong emphasis in boosting activities around development of the affordable housing segment, one of the government’s Big 4 agendas.
Here are some of the expected measures that we believe will help the sector to kick start activities and bring ripple effects to the economy:
- Home loan interest rates reduction will bring more people closer to their dream of becoming homeowners. This will result in a spike in uptake of affordable homes by propping up numbers especially of first time home buyers who will be encouraged to take up units as extra money is placed in the pockets of those already servicing home loans to boost cash flows in the segment.
- A one year tax holiday should be given to developers who are currently stressed out by the adverse effects of corona virus that continue to hurt businesses. This is essential to ensure real estate players get some financial relief to sustain business and complete on-going projects. The already subdued economic activities have impacted on the cash-flow of many real estate firms.
- Additionally, we expect marginal reduction of taxes on construction materials like cement, steel and iron sheets to address the challenge of liquidity in the sector and stimulate construction activities. This measure also boosts manufacturing output, supports infrastructure development, two other government’s Big 4 agendas.
With all these proposed interventions, we expect the sector to maintain its upward trend in terms of growth as we remain very hopeful that the government will take greater consideration to institute construction sector supportive measures.
We bet big on the government’s commitment to the Affordable Housing Program where they plan to construct 500,000 new affordable housing units in-line with the Big 4 agenda to shore up activities in the sector as part of plans to re-open the economy.