The dream of owning a home is drifting further away for many Kenyans. New market data reveals that construction costs have surged by 20% in the last six months, driven primarily by a skyrocketing price of cement and steel.

A 50kg bag of cement, which retailed at KES 650 last year, is now flirting with the KES 900 mark in some regions. Manufacturers blame the hike on the rising cost of clinker—a key raw material—and increased energy costs for production. Despite the stabilizing shilling, these input costs have proven "sticky" downwards.

Affordable Housing Threat

The inflation poses a direct threat to the government’s Affordable Housing agenda. Contractors working on state projects warn that the original budget estimates are no longer tenable. "We cannot build at 2024 prices in 2026," said a representative from the Roads and Civil Engineering Contractors Association. "Either the budget goes up, or the quality goes down."

• Developer Pain: Private developers are halting projects or passing the cost to buyers. The price of a standard two-bedroom apartment in Nairobi’s satellite towns has jumped by an average of KES 1.5 million in a year.
• The Outlook: Industry experts call for a reduction in levies on imported clinker to stabilize the market. Until then, the construction boom that defined the last decade is cooling rapidly, leaving unfinished skeletons in the skyline.