Factors driving real estate market in Kenya

Factors driving the real estate market in Kenya include high disposable income, comparatively lower interest rates and comparatively better employment prospects, all of which have increased the demand for properties. Over the years, Kenya has seen an increase in the number of rural dwellers and urban areas, with more residential, commercial and recreational properties built. While the increase in population has mitigated the demand for real estate in urban areas, it is also playing a role in pushing the prices higher in urban areas. Factors driving this process include higher levels of demand, weaker security conditions and better accessibility to capital.

There is a perception that properties in urban areas in Kenya are more expensive than properties in rural areas, but this is not the case. The differential in pricing is caused by differentials in availability of land. Urban areas, such as Nairobi, Mombasa and Kisumu have a great deal of land that can be leased. As such, they have become the preferred locations for new residential and commercial properties. The presence of educational institutions, multi-specialty hospitals and healthcare facilities in urban areas, along with better transport systems and better amenities, make them a highly attractive investment opportunity.

In contrast, rural areas do not have the same amount of available space. This makes them an increasingly unattractive investment option. However, there is a shift in the trends, with more properties being designed to cater to the needs of the growing number of urban dwellers. These include luxury residential properties, resorts, townhouses and apartments, and residential complexes with townhouses attached to them. The growth in the number of expatriates working in Africa, as a result of the growth in remittances, has also played a part in pushing the prices up.

One of the factors driving the market is the increase in the number of international airports in Kenya. Many cities, particularly in Nairobi and Mombasa have a number of scheduled commercial flights, from major world cities like London, Tokyo and New York. This means that the cost of flying has been reduced dramatically, making it more affordable for many Kenyans to travel to these destinations. This factor alone is one of the driving forces behind the increased demand for properties in these cities.

Another factor driving the urbanization of properties is the growth in the private sector. Since the boom in the construction sector has led to increased employment opportunities, more Kenyans are opting for jobs in the private sector, especially in the service sectors like engineering, construction and management. This population of skilled professionals will only increase as the country of Kenya, with its abundant resource base, continues to improve its economic performance.

Private builders are keener on building properties in the cities, as they know that this sector will experience rapid growth. This means that there will be plenty of room for speculation, as well as, an unlimited supply of property for sale. As more Kenyans opt for jobs in the service sectors, there will be an even greater demand for properties and rental apartments. The fact that most properties are priced below their worth makes them attractive to buyers.

But how long will the urban growth last? The answer largely depends on how each of these factors – above all others – will act on the situation in each city. Rapid urbanization may be sustained only if the government remains attentive to the future conditions in each of these cities. In addition, although the rates in urban centers have already begun to fall, they may rebound if the government, through subsidies and tax increases, does not stimulate investment in key infrastructure and other development projects.

Although the government has taken steps to stimulate the economy, it will probably take several years before the boom in the real estate market in Kenya takes off. And even then, there are bound to be many bumps along the way, as each of these factors drives the others. But whatever the factors driving the current trends, there is no denying that the coming years will feature some extraordinary developments in this part of the world. For example, Kenya could become a major player in the emerging global commercial real estate market.

Leave a Comment

Your email address will not be published. Required fields are marked *