Cost Of Construction Materials Spikes As Engineers Warn It'll Hinder Affordable Housing Project

• The Architectural Association of Kenya (AAK) Built Environment Report 2023 showed the cost of building materials increased significantly
• AAK report showed that the costs increased from a maximum of KSh 77,500 in January 2023 to KSh 100,800 in December 2023
• The architects said this will have a ripple effect on President William Ruto's affordable housing project

TUKO.co.ke journalist Wycliffe Musalia brings over five years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.

The cost of construction materials in Kenya continues to spike, a new report has shown.

The Architectural Association of Kenya (AAK) Built Environment Report 2023 showed that building material costs soared from a maximum of KSh 77,500 in January 2023 to KSh 100,800 in December 2023.

What is the price of steel and cement?

The report showed that steel reinforcement bars and cement costs increased to KSh 160.26 per kilo and KSh 750 per 50kg bag, respectively.

The architects' report also cited a sharp rise in the cost of land, especially in urban centres like Nairobi

AAK president Florence Nyole warned that the sharp rise in the price of building materials will disrupt President William Ruto's affordable housing project.

"There was a 14.29% increase in the price of steel reinforcement which is a major component in the construction industry, 15.3% increase in the price of cement, 22.6% in the price of fuel.. for the whole year, we can see an increase from 20% to 36% in build materials," said Nyole.

What causes rise in cost of construction materials?

The report attributed the increase to the devaluation of the Kenya shilling against the US dollar and other major currencies.

It also cited an increase in the cost of fuel and the absence of essential planning and legal frameworks.

Kenya National Bureau of Statistics (KNBS) report released in September 2023 showed that the cost of construction increased by 2.71% during the third quarter of 2023.

The survey revealed that almost all construction material indices increased except for paints, sanitary fittings, water fittings, water waste appliances, and electrical fittings.

Construction sector cut jobs

This followed a report by Stanbic Bank Kenya’s Purchasing Managers Index (PMI) showed that firms continued to cut jobs for the third month in a row.

The November 2023 index revealed that construction was the worst-hit sector in terms of reduced workload and output.

The companies attributed this to the increased cost of operations and reduced purchasing power.