A new study has shown a rise in the number of firms offering installment purchase of land from 13% to 87%, with 61% allowing payments of up to three months. In recent months, real estate companies especially those selling land have taken on installment plans to attract buyers.
The report by Property Reality Company (PRC) shows that over 80% of real estate firms do not have credit partnerships with financiers, leaving only less than 20% that are mainly backed by banks and SACCOs. To remain competitive, cost (amount and repayment flexibility), is an important factor consumers consider in selecting real estate providers.
With installment plans starting from as little as Ksh10,000 a month, real estate firms have had to up the ante in a tight interest rate regime that has forced banks to rethink their income. The number of real estate companies that have not partnered with financial providers has increased from 6% to 18%, perhaps pointing to new ways of finding financing, such as buying using installments.
The report also shows that Kenya Commercial Bank and Equity bank are the leading banks to have partnered with real estate firms in provision of financing for land purchase at a market share of 26% each while Housing Finance comes 4th at 13%.
“Land buyers, from the research we carried out consider access roads, electricity, beacons and water as the most important factors when buying property” Explains PRC General Manager, Abraham Murithi.
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