Answer to Question #125439 in Finance for yash hariya

Question

Required

What are these budgetary implications for the financial prospects of the real estate sector in Kenya? Quantitative analysis and examples from the budget required as part of your answer 

Answer 1

In Kenya the current government has played a key role more so in the economic environment and to raise the living standards for its people.

When the government came into power in 2017 it promised Kenyans of affordable housing program. This was a good idea since most of the Kenyans have not afforded good houses since Kenya gained its independence. Most live in the slums where they face very many challenges while living with their children. For instance when it rains most of these houses are usually in a pathetic state that is there is no major difference between outside and the inside of the house. This is the reason why the government came with affordable housing programs.

The government cannot achieve this on its own but it has to include the private developers who are usually known as the real estates. The real estate industry aids in buying land and building houses for their clients. For instance if the client does not have enough money to buy the piece of land he or she will be paying on an agreed basis.

For instance in a time like now where every country and everybody has been affected negatively by Covid-19 the real estates are giving a discount or a reduced price when buying land from them, examples of the real estates who are giving a discount when one buys land from them at this time include; Gakuyo real estates and Dhahabu real estates. According to my view they might be doing this to offset the loans they have from banks to avoid it from accumulating.

The government has however reduced the interest rates for banks and therefore the real estates should not worry so much.