NAIROBI, KENYA – The dream of owning a home remains critically out of reach for most Kenyans, with a new survey revealing that only four percent of the population has the financial capacity to afford a mortgage valued at KSh 10 million. The report, a joint effort by pension firm Zamara, the Centre for Affordable Housing Finance in Africa (CAHF), and Financial Sector Deepening Kenya (FSD Kenya), casts a harsh light on the severe disconnect between property prices, income levels, and the cost of financing in East Africa's largest economy.

The findings, released on Tuesday, November 11, 2025, show that out of 145,205 pension scheme members surveyed, a mere 6,146 could service a house loan exceeding KSh 10 million. This data aligns with recent statistics from the Central Bank of Kenya (CBK), which place the average mortgage size at approximately KSh 9 million. According to the CBK's 2024 Annual Supervision report, the average interest rate for mortgages stood at 14.9 percent, with a typical repayment period of 11 years.

For a Kenyan household to service an average KSh 9 million mortgage under these terms, a monthly instalment of around KSh 140,000 is required. Factoring in the standard banking requirement that borrowers retain at least one-third of their income after all deductions, a prospective homeowner would need a gross monthly salary exceeding KSh 420,000. This figure starkly contrasts with official data showing that more than 85 percent of formally employed Kenyans earn less than KSh 100,000 per month, effectively disqualifying a vast majority from the mortgage market.

The Root of the Crisis: A Perfect Storm

The affordability gap is not a new phenomenon but the result of a persistent combination of economic pressures. The CBK has consistently identified several key obstacles hindering the growth of the mortgage market, which had only 30,015 active accounts by the end of 2023. These challenges include:

• High Property Costs: Rapid urbanization and the rising cost of land, particularly in Nairobi and its environs, have pushed house prices beyond the reach of average earners.
• Low and Stagnant Incomes: While property values have soared, wage growth has not kept pace, widening the gap between aspiration and reality for millions.
• Expensive Financing: High interest rates on mortgages make borrowing prohibitive. The prevalence of variable interest rates on over 88% of loans also exposes borrowers to market volatility.
• Incidental Costs: High transactional fees, including stamp duty, legal charges, and valuation fees, add a significant upfront financial burden on potential buyers.

Government Intervention and Lingering Deficit

The Kenyan government has attempted to address the housing shortage through its ambitious Affordable Housing Programme (AHP), which aims to deliver over 200,000 units annually. The program is designed to cater to different income brackets, with social housing units intended for those earning up to KSh 20,000 per month. Furthermore, the Kenya Mortgage Refinance Company (KMRC) was established to provide subsidised, long-term funds to primary mortgage lenders, with the goal of lowering interest rates for affordable housing buyers to single digits.

The Zamara survey notes that under the more favourable KMRC rate of 9.5% over a 25-year period, a household earning KSh 100,000 a month could potentially qualify for a KSh 3.4 million mortgage, sufficient for a unit under the AHP. However, the rollout of the AHP has faced significant challenges, falling far short of its initial targets. According to the Kenya National Bureau of Statistics (KNBS), the number of completed AHP units dropped by over 50% in 2024 compared to the previous year.

This situation perpetuates Kenya's massive housing deficit, estimated by the World Bank and Habitat for Humanity to be around 2 million units, with an annual shortfall of 200,000 homes. The crisis is most acute in urban areas, where approximately 60% of Nairobi's population resides in informal settlements. Without a structural alignment of property prices, income growth, and access to affordable, long-term financing, the goal of widespread homeownership in Kenya will remain an elusive dream for the overwhelming majority.