Home mortgage demand suffered from Covid-19 impact - CBK
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Loading... - Lila Lelei
- 06 Jun 2022
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Nairobi city resident, James Mwangi had hoped 2020 was the year he would delve into his real estate investment plan.
Three months into the year, Kenya recorded its first case of Covid-19 .
As much as Mwangi and other thousands of investors hoped the situation would stabilise, the World Health Organisation declared a global pandemic and restrictions were imposed worldwide.
"I had to shelve my plan to construct until 2021. However, as we all know last year was not easy either," Mwangi told the Star on Wednesday.
He said the stress of getting a mortgage has forced him to look for other home ownership plans like renting to own.
Latest Central Bank of Kenya Banking sector annual data shows the pandemic had a significant negative impact on the demand for residential mortgage loans.
The report shows that demand for residential mortgages declined in 2021 due to lack of affordability as a result of job losses, reduced disposable incomes and business closures.
According to the report, there was a decline in the level of investments in real estates due the impact of Covid-19.
Banks tightened their credit standards for access to mortgage loans last year due to increased uncertainties. A number of lenders restructured and reviewed their terms for mortgage loans during the period.
Several banks according to CBK recorded increase in non-performing loans due to reduced repayment ability.
"The outstanding value of non-performing mortgage loans increased marginally from Sh27.8 billion in December 2020, to Sh28.3 billion in December 2021," the report states. Read More…
