ADVERT 
Absa Bank Kenya has launched a bold new home financing solution aimed at tackling the country’s deepening housing shortage, offering a market-leading mortgage rate of 8.9% per annum and funding of up to 105% for qualified buyers.
The innovative developer-led financing model—dubbed the developer off-taker proposition—is designed to bridge long-standing gaps between homebuyers, developers, and financiers, potentially reshaping Kenya’s housing ecosystem.
Kenya currently faces a housing deficit exceeding two million units, with annual demand estimated at 250,000 households against a supply of fewer than 50,000 units. Despite strong demand, many developments stall due to a lack of committed buyers early in the construction phase, while aspiring homeowners struggle with rigid and costly financing options.
Absa’s new approach seeks to break this cycle by connecting buyers directly with developers from the outset. Through the model, customers can access mortgage pre-assessments during construction, benefit from negotiated legal and valuation services, and secure competitive financing tied to approved developments.
The proposition allows buyers to enter projects at the off-plan stage—unlocking more flexible payment terms and potentially lower acquisition costs—while developers gain improved demand visibility and reduced risk of unsold units upon completion.
Speaking at the International Housing Solutions (IHS) Kenya 2nd Affordable Housing Conference 2026, Absa Bank Kenya Managing Executive for Corporate and Investment Banking, James Agin, said the country’s housing crisis is fundamentally a structural issue.
“Kenya’s housing challenge is not just about demand—it is about how housing is financed, delivered, and connected to the end user,” Agin said. “A significant portion of the market earns outside traditional income structures, yet most financing models still cater to predictable, formal income streams.”
He noted that this mismatch continues to lock out many potential homeowners and stall housing delivery.
Agin emphasized that scaling affordable housing will depend on stronger partnerships and better alignment between financing models and real market conditions.
“Housing is a long-term asset, but financing remains largely short-term. That mismatch affects both supply and affordability. By connecting developers and buyers earlier, we are making homeownership more accessible while improving project viability.”
Industry analysts say the 8.9% rate—well below prevailing market averages—could significantly lower the cost of borrowing and stimulate uptake, particularly among middle-income earners.
The inclusion of up to 105% financing is also a notable shift, potentially covering not just property costs but associated expenses such as legal fees and valuation—key barriers that often delay or derail homeownership.
The initiative forms part of Absa’s broader strategy to support commercially viable housing ecosystems and expand access to sustainable homeownership across Kenya.
If successfully scaled, the model could mark a turning point in how housing projects are financed and delivered—bringing Kenya closer to closing its housing gap while unlocking opportunities for both developers and aspiring homeowners.
