Point Properties Ltd – Low Cost Housing

1.5 percent housing levy pay cut for workers to start March

Formally employed workers could start paying a 1.5 percent salary deduction beginning March 1 to finance construction of cheap houses by the State. Transport, Housing and Infrastructure Cabinet Secretary James Macharia Tuesday said the government has reached an agreement with the workers’ union, which will pave the way for an end to court injunctions that had stopped the deduction. “We had injunctions that halted the process, but the parties have agreed to withdraw them so we are ready to proceed with the project,” said Mr Macharia in Nyeri during an inspection of ongoing public projects in the county. Employment and Labour Relations Court Judge Hellen Wasilwa had granted the order to halt the deductions following an urgent application by the workers’ umbrella body, the Central Organisation of Trade Unions (Cotu) in December. Cotu secretary-general Francis Atwoli had faulted the tax, saying there was no public consultation before its implementation. The levy is to be deducted from each employee’s basic salary and remitted to the National Housing Development Fund (NHDF). Violating orders Cotu has, however, not made public its position on the matter. An application filed by the Ministry of Housing asking the court to lift the injunction against the deduction…

If you earn less than Sh100, 000 and can spare a third of your income, owning a home will be within your reach under a Government plan to spur a housing boom. The State has created a company to offer cheap loans to banks to target civil servants, self-employed persons, or salaried employees with mortgage of up to 30 years to reduce the pressure on repayment. The Kenya Mortgage Refinancing Company (KMRC) will receive a Sh16.1 billion ($160 million) from the World Bank to start operations this month and will be owned by the Government and the private sector. “KMRC will contribute to the broad objective of the Government of Kenya to deliver 500,000 affordable homes by 2022 targeting households with incomes of up to Sh100,000 per month,” the National Treasury said in a document pitched to bank bosses and sacco CEOs. Treasury Cabinet Secretary Henry Rotich yesterday told financial institution bosses in Nairobi that the Government aimed to own about 20 per cent of the firm and would pump in Sh1.5 billion fully paid share capital. The rest of the Sh5 billion authorised share capital will come from development partners, banks, and saccos interested in owning part of the…

Three real estate developers are building low-cost houses along Mombasa Road targeting first-time buyers with prices starting at Sh1 million per unit. The developers — Rogam Investments, Karibu Homes and Peninsula Development Company — are pitching to buyers that the monthly mortgage payments for the units are equivalent to their current rent. At an interest rate of 15 per cent per year, a Sh1 million house would require Sh12,000 a month for a 20-year mortgage while a Sh2.5 million house would require Sh31,000 a month at the same interest over a similar period. Rogam Investments is undertaking the project as a mixed development of studios and apartments in Mlolongo, Machakos County. The project, dubbed First Homes, has a sale value of Sh500 million. The firm said that it was aiming at attracting first-time home buyers such as working recent graduates. Mr Aaron Gitonga, a director at Rogam Investments, said the firm chose to serve the low-end market because it is under-served, unlike the high-end one which has signs of saturation. “This is a market where there is a lot of demand but not many developers are looking at it,” Mr Gitonga told the Business Daily. First Homes has studio apartments…