How the Cost of Building Materials is Affecting Construction Progress in Kenya
Taxes being levied on some of the products have also been cited as contributing to the rising costs.
Samwel Bwire
The fluctuation of construction material prices is influencing the completion of commercial buildings. When there is inflation, material prices go up, and this leads to constructors struggling to supply the materials, especially if they're higher than the quoted cost. This causes delays as contractors look for alternatives.
According to the Built Environment last year's analysis, the building and construction industry for the past years has cited the cost of fuel as one of the factors pushing up the cost of building materials.
Taxes being levied on some of the products have also been cited as contributing to the rising costs. The transport industry directly influences construction materials; as fuel prices go up so do material prices.
The prices and availability of essential construction materials such as steel, paint, aluminum, and cement continue to remain unreliable in Kenya. According to the Architectural Association of Kenya (KAA) statistics, the average price of 50 kg of cement rose from Ksh. 650 in December 2022 to Ksh. 750 in December 2023, and so did the price of other materials, which is a threat to the construction industry in Kenya.
Additionally, there has been an increase in paint prices in Kenya; this has been a result of paint manufacturers having to pay a 10 percent excise tax on imported resin in addition to a 16 percent value-added tax (VAT) on petroleum-based ingredients, AAK says.
Recently, Principle Secretary for Housing and Urban Development Charles Hinga challenged manufacturers to step up production outputs to meet the increasing demand brought about by the construction industry, especially the affordable housing project. Speaking during the validation workshop for the National Housing Corporation (NHC 2023–2027), Mr. Hinga highlighted that the use of locally produced materials will help in cutting the overall cost of building materials in Kenya as well as housing units under the Affordable Housing Programme.
Hinya also called on manufacturers to leverage economies of scale as one way of bringing down the cost of production.
He also assured that the government is ensuring that it does all that is necessary, including providing infrastructure and providing land to private developers, so that the government can meet the planned units at an affordable price.
If you have a real estate press release or any other information that you would like featured on the African Real Estate Blog Post, do reach out to us via email at [email protected]
