The Kenyan population will more than triple over the next 40 years, this is the finding of UN-HABITAT in its 2010 report on the State of African Cities: Governance, Inequality and the Land Market. According to several studies and statistics on the question, the African continent will experience a process of very sustained population during the next decades.

A demographic growth that will inevitably be accompanied by strong urbanization of cities that has already begun elsewhere. Thus, according to this report, 400 million Africans currently live in urban areas, or 40% of the population, against 3% 50 years ago and 1.2 billion in 2050, or 60% of the population.

Africa is thus to date the continent where urban growth is the strongest. The number of city dwellers is constantly increasing (about 5% to 7% per year, a rate twice as fast as its total population). Thus, Cairo (Egypt) and Nairobi (Kenya), with 11 million inhabitants, remains the largest agglomeration.

But, it will be overtaken by Lagos, capital of Nigeria (12.4 million) in 2015, then it will turn Kinshasa (Democratic Republic of Congo), with 12.7 million inhabitants, in 2020. This strong expansion to come, pushes African cities to organize by concentrating their efforts on certain sectors such as real estate, directly linked to this future demographic explosion.

Also ReadSelling Your House For Profit In Kenya – Things To Consider

From the capital of Kenya, Nairobi to the different counties, real estate remains an attractive investment for many. Demand for housing is increasing with rising of urbanization and decentralization, but the government has not been able to meet the annual housing needs.

This has opened up business opportunities for private sector entrepreneur who buy land or Plan To Buy Property In Kenya to meet different types of tastes and budgets.

Kenya’s real estate sector remains a central part of the country’s short and long-term economic growth agenda, giving it a positive outlook. Real estate growth has been fueled by strong economic growth and infrastructure development.

According to HayeOne, one of the top Nairobi-based top real estate developers in Kenya, real estate sector across Kenya continues to grow across the country supported by high annual returns that stands at above 20 percent, high demographic, rapid urbanization at 4.3 percent annually, an expanding middle-class and improved infrastructure.

A latest report indicates that the current sentiment of real estate investors in the sector is neutral during the election period. “Investors and developers should adopt a strategy of waiting for new developments until the end of the election period,” analysts said in their January 2017 report.

Also ReadProcess To Follow For Buying A House in Kenya

Rising Land prices in Kenya

According to an analysis, land prices in Nairobi’s satellite cities rose by 21.4 percent in the third quarter of 2016, the strongest growth since 2014.

This increase is attributable to the announcement by government planned infrastructure projects, including the Standard Gauge rail commuter train and construction of the planned Western bypass in Nairobi.

Juja, Ruiru and Limuru recorded the largest gains in the third quarter of 2016, with price increases of 43.1%, 42.9% and 34.9% respectively.

These areas are suitable for investors interested in speculation or construction of residential and commercial buildings.

The opposite has occurred in the highly congested satellite cities, such as Ngong, where prices fell by 2.3%.

Land prices in the suburbs of Nairobi marginally by 1.4% as a result of road construction, such as the extension of the Outer Ring road and the completion of the south bypass.

Denholm and Lang’ata was the best-performing suburbs with prices up 9.3% and 7.7% respectively. Even with high prices, the occupancy of apartments and flats is high in these areas that offer opportunities for those looking to build for sale or rent.

Also ReadBuying House or Apartment In Kenya – Which Is Better?

The risk of overproduction

Investor demand is expected to put pressure on land prices in satellite cities of Kenya – Kitengela, Athi River, Syokimau, Ngong, Juja, Thika, among others – that could lead to higher prices.

Developments are expected to increase, which could lead to stagnant rental rates in the short and medium term. In Nairobi, small price increases are expected as investor speculation declines pending elections.

Kenyan Counties are opening up

Prices are expected to rise, driven by investor demand, as decentralization materializes.

Its subregional indices show a preference for county apartments, which accounted for about 60% of units sold during the quarter, compared with 23% and 17% for cottages and bungalows.

In a way, the apartments are more attractive to buyers because of prices and availability of amenities.

The determinants of price and purchase for houses remain the size measured by the floor area, the number of bedrooms, the bathroom and the presence of independent dwellings for staff, as well as parking and availability amenities such as water or related investments such as drilling.

Also ReadReal Estate Property Valuation in Kenya – Buy or Resale

Most buyers are looking for safe neighborhoods with adequate amenities. For example, houses in closed communities – often very expensive given the superior atmosphere associated with controlled development, security, privacy and landscape value-will dictate price fluctuations.

Similarly, the proximity of social amenities such as shopping centers, paved roads, schools, hospitals and the presence of car parks, among others, contribute significantly to the price of homes.

Demand vs price: Hot spots in Real Estate Kenya

There is a strong demand for exclusive suburbs less built than suburbs characterized by high density of development. Muthaiga leads the suburban pack with a double-digit increase in real estate asking prices (15.8%), followed by Kitisuru (14.2%) and Lang’ata (13.5%).

Single-detached homes, located mainly in low-density suburbs, recorded the best performance in 2016, recording an annual increase of 11.3% in asking prices, indicating that investors looking to take advantage of single-detached homes should look for less populated areas.

Most of these suburbs are exclusively high-end and, like other world markets, high-end areas tend to be the least affected by a stagnant economy.

Kilimani recorded the largest annual price drop of 3.5% due to the price correction of large, recently oversupplied apartments.

Also ReadWhich Are The Best Real Estate Investment Opportunities In Kenya In 2018?

Average asking prices for satellite cities increased by 1.5% in the fourth quarter of 2016 and 8.6% over the year. Similarly, rents increased only 0.2% in the fourth quarter of 2016 and 4% over the year.

Selling and leasing prices in the satellite cities in 2016 recorded the smallest annual increase since 2008, due to the economic slowdown that has resulted in a downturn in the number of transactions in these areas.

Kenya’s rural towns – New frontier for real estate developers

Kenya's rural towns - New frontier for real estate developers

High Real Estate potential suburbs in Kenya

  • Thindigua (Kiambu road),
  • Kiambu, south B, south C,
  • Kabete,
  • Komarock,
  • Imara Daima,
  • Membley,
  • Buruburu,
  • Rongai,
  • Waiyaki road (Uthiru, Regen, Kinoo, Kikuyu),
  • Mbagathi road,
  • Ngong road to Langata.

Also ReadList Of 8 Best Investment Opportunities In Kenya 2018

Upscale Suburbs

  • Kileleshwa,
  • Kilimani,
  • Lavington,
  • Westlands,
  • Spring Valley,
  • Riverside,
  • Milimani (Kisumu),
  • Milimani (Nakuru),
  • Runda,
  • Karen,
  • Park,
  • Parkways,
  • Ridgeways,
  • Muthaiga,
  • Loresho,
  • Kitisuru,
  • Adams Arcade,
  • Nyali,
  • Mountain View,
  • Nyari.

Also ReadWhy Hire A Real Estate Agent In Kenya?

High Potential Kenyan Satellite Cities

  • Athi River,
  • Mlolongo,
  • Mavoko,
  • Nakuru,
  • Ngong,
  • Ruaka,
  • Syokimau,
  • Embakasi,
  • Kahawa Wendani,
  • Thika,
  • Mtwapa,
  • Utange,
  • Kitengela,
  • Kiembeni,
  • Nyeri,
  • Likoni,
  • Eldoret,
  • Ruiru,
  • Kilifi,
  • Thika Road (Kasarani, Roysambu, Ruaraka),
  • Meru,
  • Bungoma

Also ReadHow To Find Best Real Estate Agent in Kenya?

The role of real estate agency

Real estate agencies are a kind of mandatory passage for any real estate investor looking to invest in real estate Kenya. Their mission is to give information on the apartments and property, or in case you want to buy a home in Kenya or Buying Real Estate Property in Nairobi . In many African countries, their arrival has brought order to this sector, which a few years ago was disordered. Several real estate agencies bring their expertise to the continent .

You’ve already wondered “why hire a real estate agent?” Today customers find many channels available to buy or sell properties for themselves and often feel that saving the agent’s commission is a benefit.

Some do it well but many have no success. So, if you’ve wondered the same thing, here are the top 3 reasons (in my humble opinion) why you might consider hiring a professional real estate agent in Kenya.

Appropriate price from the 1st day

Evaluating the value of your home is paramount at the very beginning of your offer as it can cost you a lot of time on the market as well as thousands of dollars. A new property on the market always has a greater chance of selling.

It is important to properly represent the price of a new property because there are buyers who are watching for the arrival of a perfect house, which is why the “good” price is vital from the beginning. Contrary to what some people think, agents do not choose prices for sellers or buyers.

Also ReadSelling Your House For Profit In Kenya – Things To Consider

However, an agent will help clients make the right choices for themselves. The sales agents ask buyers to weigh all the data provided to them and choose a price. Then, based on market supply, demand, and conditions, the agent will develop a trading strategy.

Real estate agents Kenya Nairobi

Benefit from marketing and technological tools for a better service

Real estate agents have a mission of service and advice, based on empathy and the desire to satisfy individuals in their real estate project. To achieve this, they rely on external tools, which can be more efficient and better serve customers such as immersive tours, 3D mapping and reports of online visits.

Also ReadProcess To Follow For Buying A House in Kenya

Negotiation skills and paperwork

Unlike buyers and sellers, the best real estate brokers negotiate for a living. They are able to eliminate the emotional aspects of the transaction and focus on finding the best possible offer for their clients because they possess the skills and experience.

Good agents do not only communicate offers between buyers and sellers. They are trained professionals armed with skills to present the case of their client in the best possible way.

And once the transaction is over, transfer all those discussions to legal format, the paperwork could be tricky. Most real estate records are average thicknesses of one to three inches of documents.

Also ReadPlanning To Buy Property In Kenya – 13 Things To Consider

Deal with someone who has expertise in the real estate market

The real estate agent has a knowledge of the local market which allows him to know what types of properties are currently selling and the criteria favored by the buyers.

This market vision makes it possible to respond as closely as possible to local demand. At H1 you can learn to find the best real estate agent in Kenya?

Professional network

Active agents interact with other professionals of Kenya all the time, many of whom provide real estate development services. They know which suppliers have a reputation for efficiency, skills and competitive prices.

Agents can give you a list of references with whom they have worked and provide basic information to help you make a fair selection to save your time and money. How many times you had to redo a roof or undo a wall?

Agents have seen and heard many horror stories, they have the experience and the network to support you and guide you in your choices.

Also ReadTypes Of Fees Involved In Buying Property In Kenya

qualified real estate agents in Kenya

Answer questions at closing

Even the easiest transactions that end without complications can come back to haunt. For example, tax authorities collecting property tax assessments, document stamps, or transfer taxes may take several months to delay and mix invoices, but a simple call to your agent can help to clear up the confusion.

Many questions may appear that have been overlooked in the excitement of closing. Good real estate agents are ready to help. Decent and honest agents do not leave you in the dust to fend for themselves.

Also ReadTop Real Estate Companies In Kenya

Develop relationships for long-term business

Referrals are the basis of an agent’s success and his ongoing career in real estate. Few agents would survive if their livelihoods depended on the creation of new businesses. This emphasis gives agents strong incentives to make some customers satisfied and happy. It also means that an agent who stays in the business will be by your side when you need to rehire him. Many will periodically send you updates to the market to keep you informed.

Still not convinced? Let’s talk about the commission

Homeowners often try to sell their home themselves to save on the agent’s commission (which is always negotiable). However, it must be considered that most buyers work with real estate agents in kenya when looking for a new property.

f you do not pay a commission to the real estate agent representing the buyer, you have eliminated most buyers from your market. Eliminating most buyers can only decrease your estimated selling price and end up making you lose the money you initially thought to save on the agent’s commission.

Also ReadReal Estate Property Valuation in Kenya – Buy or Resale

And if you agree to pay a cooperating broker, you save only half a commission. In addition to saving only half a commission, the buyer is represented by a real estate agent and you are not. Who do you think will be the leader in the negotiations and the sales process?

These are not the only reasons that make real estate agents essential. Nevertheless, it is a good base to share with the customers so they can realize all the benefits a real estate agent can bring to them.

For our part, we at Hayer One are committed to continuing to provide you with the maximum real estate marketing advice so that we can offer all our customers the exceptional services.

Real Estate Investment in Kenya – Tips & Things You must Know

Since 2000 real estate in Kenya has been rising steadily, as more and more Kenyans are interested in owning land and real estate. This boom has led to the growth of many real estate companies and real estate professionals. You will always get help for any type of property you want to buy, whether it is a residential or commercial property.

A diversified and experienced management team, with extensive experience in the Kenyan real estate market, manages most properties in Kenya. Many top real estate companies in Kenya specialize in real estate in large cities, some with branches in rural Kenya. These property development companies are known for their portfolio of land, a sale of land, apartments and home ownership.

For someone who ventures into the Kenyan market, especially as a buyer, it is not enough to look for real estate in Nairobi or Kenya online. This is just a step in the right direction, but knowing who to contact every time you need an apartment will make your job easier.

Here is a List of top real estate property Developers in Kenya you can call anywhere in Kenya to help you find a home.

List of Best Real Estate Companies in Kenya (2019)

  1. Hayer One Ltd
  2. Gakuyo Real Estate
  3. Azizi Realtors
  4. Llyod Masika
  5. Villa Care Ltd
  6. Suraya Property Group
  7. Hass Consult Ltd
  8. Optiven enterprise ltd Kenya
  9. Dinara Developers
  10. Myspace Properties Kenya

List Of Real Estate Companies In Kenya - Top property developers

 

1. Hayer One Ltd

Real estate property developers nairobi kenya

Hayer One, one of the top upcoming Real Estate Property development company in Kenya in 2018, was created with a clear vision of providing high quality and personalized services to individuals, private sector companies and government clients in Kenya.

If you are a potential buyer and looking for a house or apartment, or need help in buying real estate in Nairobi, then you should visit Hayer One, a property management company with the best real estate agent in Kenya.

The mission of the Hayer One group is simple. Believe that the fastest way to succeed is to help others. To fulfill this mission, they develop, build and ensure ownership. But more than real estate developers in Kenya, the Hayer One team is an emotion developer for many families.

Don’t Miss to Check Out Our Latest Developments :

Top Real Estate Companies In Kenya 2018

The Marquis    ⚪ The Address    ⚪ The Crescent    ⚪ The Gateway    ⚪ Elixir

2. Gakuyo Real Estate

 Gakuyo real estate

Real estate Gakuyo too represents a unique opportunity for the investor in Kenya. You get a double benefit when you invest with Gakuyo. The company gives you the opportunity to own land and invest in agribusiness projects, allowing you to earn money as soon as the products are harvested.

Gakuyo real estate agents, who promise good value, manage this lucrative business. The project’s products are sold in the closest markets in Makongeni and Thika, which means that the project owners are guaranteed to make quick money once they have bought the land.

3. Azizi Realtors

Azizi Realtors kenya

Azizi Realtors was created to offer professional real estate consulting services by creating synergies in operational real estate through integrity, transparency and speed of service delivery.

The company’s executives and senior executives have a combined total experience of more than 30 years in real estate sales, leasing, property management and real estate investment consulting.

The company specializes in prime properties in Nairobi and the rest of the country.

4. Llyod Masika

 Llyod Masika kenya - Top real estate companies in kenya

Lloyd Masika Limited is one of the leading real estate agencies in Kenya and is registered. He provides professional valuation and real estate services in Kenya. Created since 1979, it is structured in three main departments, complementary in the provision of services.

5. Villa Care Ltd

 villa care - Top real estate companies in kenya

A company that owns some of the best real estate agents in Kenya. It focuses on providing quality, customized and customized services to clients. The fast and steady growth of the company ensures that you deal with the best in the industry.

6. Suraya Property Group

leading real estate companies in kenya

Suraya Property Group Ltd is a real estate company created in 2006 by Pete and Sue Muraya. Suraya Property aims to become the leading real estate development company in Africa by creating lifestyles that change the way people LIVE, WORK and PLAY through innovative, environmentally friendly and affordable developments.

7. Hass Consult Ltd

It is one of the top real estate developers in Nairobi whose impact is felt in Kenya since its creation in 1992. The company manages a number of real estate services, including consulting, sales, rental and management of commercial and residential buildings.

8. Optiven enterprise ltd Kenya

This is a reliable real estate agency in Kenya. The company is known for locating prime properties in Kenya. If you are looking for a place to invest, especially in the purchase of land, contact the team. Optiven offers customers the best deals at affordable and reasonable rates.

The projects proposed by Optiven are often futuristic and aim to help investors get a quick return on their money once they are launched. Strategic locations close to amenities often characterize properties, but their cost and payment plan are unbeatable.

9. Dinara Developers

List of Property Developers in Kenya

Over the years, Dinara Developers has become a company offering the development of affordable and quality housing.

Outside of Dinara Developers selling land; purchase large parcels of land and subdivide them for sale to individuals; they also add value to the land before the sale.

10. Myspace Properties Kenya

Myspace Properties is a good choice when it comes to immersing yourself in real estate kenya, development and the housing sector in Kenya. They aim to provide the best services and respond to Kenya’s real estate boom, specifically in Mombasa, benefiting buyers, investors, owners and developers to meet their needs.

As the real estate investment in Kenya continue to grow. The Top Real Estate Companies in Kenya mentioned above can be a guide for beginners. Young people are acquiring land and property, which means that this industry is growing more and more.

Also Read Other Posts:

July 18,2018..A good year for real estate investors. Yes, you heard it right!  Kenya is the top investment choice for both local as well as foreigner investors with the most attractive investment destinations of the times.

Mr. Kfir Rusin, EAPI (East Africa Property  Investment ) Summit Managing Director Says “Kenya has become a lightning rod for investment as both local and foreign investors have looked to diversify their investments across multiple market segments from retail, industrial, housing and office space.” – as reported in Business Today Kenya.

After experiencing a slowdown in 2017, there is optimism that the market will pick up in 2018, however. Nairobi is a key regional centre that offers good prospects for real estate investors. It is a real estate hub comprising of top notch brokers, agents & real estate developers in Kenya

Are you a keen Kenyan real estate investor looking for opportunities to invest in real estate in Kenya? In this article, we will reveal all the Real Estate Investment Opportunities you need to Venture Into Real Estate Business In Kenya.

Real Estate & Property Investment Options in Kenya

There are three major investment options in Kenya Real Estate Market 2018 are:

🎯 Buying And Selling Land For Profit In Kenya.

Buying land or Investing In Land In Kenya is not always the right investment in Kenya. If you buy a piece of land with the thought of selling it after a few years, there is no guarantee that its price will only rise with the growing years. Typically the land economics says something different.

As per thumb rule of land economics, “If you buy a piece of land and its appreciation rate is slower than the rate of inflation, then you are actually making a loss on that investment, even if you sell the land for a profit”.

Due to inadequate understanding of property market, people end up losing money by purchasing land. This is a huge investment business so a person must be aware of the stats that a location’s property market will soon decline and, therefore, avoid buying land there when the only aim of buying land is to earn profit by selling it after a few years.

🎯 Buy Land and Build property for Rent or Sale.

Building property is another property investment avenue in Kenya. Building any property like school, college, hospital or even apartments may seem a profitable investment but it requires a lot of expertise and huge capital investment. In fact, if one has the finances, one can buy land and build residential units which in future will offer higher returns when resale or to let.. This strategy is capital intensive.

🎯 Investment in R.E.I.T:

Among the three options, investing in joint venture or R.E.I.T is the best. The investor doesn’t have to physically deal with architects, quantity surveyors, structural engineers etc as in the case of buying land then developing.

Another advantage with the joint venture option is that the pooling of resources from like minded investors can help to reduce the capital required from borrowing from banks significantly, hence an easier and cost effective source of development financing.

The investor also benefits from shared risk where property and conveyancing lawyers , land surveyors and land valuers have advised on the conveyancing process , ensuring the land is clean and without any encumbrance, ready for development.

Best Real Estate Investment Opportunities In Kenya

Best Real Estate Investment Opportunities In Kenya

🏘️Low Income Housing Development –

A significant decline in supply of low to middle income housing is spotted in the Government’s plan. As per statistics, development of a million units of public rental housing is required over the next five years. This sector is undersupplied because margins remain extremely thin. If the government creates the relevant incentives to widen this margin, Low income housing could be a boom market for 2018.

🏘️Existing Commercial Properties –

A major upswing in office enquiries is therefore expected in 2018. Now that 2018 is expected to be a rebound for real estate investments therefore, businesses looking to move office are firmly adopting the “wait and see” election approach. Presently the existing commercial properties backed with impatient capital is proven to be reasonable. A right property purchase should be able to provide 12%+ yields over a 5+ year horizon.

🏘️Student Housing –

We have seen a hold back in the business potential of student accomodation in Kenya though it may yield high returns.Student housing in Kenya is now a powerful alternative asset which if developed attractive will definitely guarantee tenanting., Hence, the development of student accommodation will prove to be the next big thing in the real estate.

 

🏘️Warehousing and Factory Development –

The slow investment in the industrial sector has lead to a chronic shortage of good warehouses that has presented new opportunities for growth in the country. The increase in manufacturing will increase demand for warehouses. Long lease warehousing is one of the most attractive Real Estate investment opportunities in the continent. Thus, setting up warehouses and industries will be an indication that industrial sector could be the next frontier for growth in Kenya.

🏘️Secondary City Retail –

Nairobians now are enjoying ample options for consumers needs like supermarkets, outlets and a broad range of shopping options are available in urban cities of country, however the majority of the small towns remain undersupplied. The county retail must be customized to fit its demographics.  We have seen several untapped opportunities in the region’s secondary cities and towns to better serve consumers. Increasing urbanisation should fuel growth in Kenya’s retail sector as there are significant growth opportunities in Kenya’s second-tier cities.

Know more about best places to invest in real estate in kenya.

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The Marquis    ⚪ The Address    ⚪ The Crescent    ⚪ The Gateway    ⚪ Elixir

Property Investment in Kenya

Kenya’s real estate sector is accelerating at a rapid pace making a substantial contribution to the GDP recorded as 13.8 per cent in 2016 rose from 12.6 in 2010 by the Kenya National Bureau of Statistics’ (KNBS) under its annual Economic Survey 2017. The construction industry grew by 9.2 per cent in 2016 from an expansion of 13.9 percent registered in 2015.

Planning to invest in Real Estate Kenya? Here is what all you need to know about, before you start:

  1. StartUp Capital
  2. Real Estate Training
  3. Property Evaluation
  4. Make the Down Payment
  5. BuildUp Equity

Let’s discuss in detail.

☀️StartUp Capital Required

Startup capital refers to the money required to start a new investment. To begin with, you have to start building up startup capital. You should start saving a fixed amount every month from your wage. Why not set up an automatic transaction of your salary to a savings account? You can also enquire loan offers for property investment in local banks.

Hence, get ready with an effective financial plan  that will enable you to contribute at least 25 percent of the down payment on the residential real estate you’re planning to invest in.

☀️Real Estate Training – Get trained

As a beginner in the real estate industry, it is necessary to be well aware of the latest Real Estate trends and opportunities available in the Kenyan Real Estate market for new investors, only then you can make a smart move. Therefore, find some well-reputed real estate investors that offer real estate seminars to help you learn more about property business and its essentials.

Besides, you can also purchase books on real estate and read more about real estate market in Kenya.

☀️Property Evaluation:

Before you invest into any property, you must know about property assessment. Hire an appraiser who has good experience of property sector.  Thus, you can seek guidance from him in evaluating the value of a particular property.

This is important because this will help you understand the financial viability of the property.

☀️Make Payment:

If the value of the property meets your standards, you can head on over to due diligence to ensure that the property you’re investing in is free from any type of encumbrances. Once verified, you can move ahead with the down payment. Once the payment is done and the property is handed over to you, this is entirely your decision to either rent the property or build it anyways.

☀️Equity:

Now, the final step is building up equity for your investment. How will you manage to build this up? Well, one of the solution is to let your property and get mortgage paid by the tenant. Equity is basically the amount of the property you own whether it is a home or just a land. It is important because if the value of home increases which means debt decreases and thus, equity again rises up and you can utilize this amount for investing in other property. This will create a foundation for a successful real estate business. But wait wait wait….Make sure while you are building it up, you definitely have contingency purposes.

 Looking for Real Estate property? Let us help you! Contact us today !!

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Real Estate Market Kenya 2018 – Is There any Boom?

The real-estate sector of Kenya is diversified among three sections – people, geography, and property types where people include high, middle and lower sections of society, geography defines the area to be utilized for property developments and property types including retail, office, residential, Industrial and special properties mainly found in urban areas.

A significant growth of about 6% was seen in the real estate market in Kenya in the financial year 2016. The population growth rate is about 2.7% per annum and the urban growth of the country analyzed in 2016 was merely over  27% of the total population of Kenya and is expected to exceed up to 50% by 2020.

Assuming this, the urban population of Kenya is growing as 500,000 people per year which means Kenya needs to construct over 250,000  houses annually for an urban development in the nation.

The author of “The ABC of Real Estate Investment in Kenya, Kariuki Waweru says that investment in real estate of Kenya has never been a promising business move. He described it with a real example –

In 2008, the price of an acre of land in Kitengela was Sh250,000. In 2012, the price of the land had risen to Sh1.2 million.  Now, this was the real estate bubble that burst in Kitengela. But people who invested into land got their fingers burnt as in 2017 as the price for the same piece of land was 1.5 million.

Let us explain to you the theory of land economics –

     “If you buy a piece of land and its appreciation rate is slower than the rate of inflation, then you are actually making a loss on that investment, even if you sell the land for a profit.”

Hence, if you have invested money on a land with a perspective to earn profit from its appreciated value, unfortunately, it is not the successful move. In case, you buy a land and carry out temporary projects such as building semi-permanent apartments, offices, school, colleges or other properties etc, it may extract value from land rather than a land left for years.

Kenya’s Real Estate sector is one of the key sectors of the nation’s economy. and has been responding to increased demand from a decade.  In fact, Kenya has established to be the preferred hub with Nairobi as the center for multinationals as well as other international organizations. Kenyan has seen a boom in most of the private sectors in the mid to late 2000s and the real estate is one of those private sectors.

In response, the Kenyan Government is also participating in every possible way for the economy’s growth. A massive investment in infrastructure development was made by Kenyan Government and apart from this, important steps have been taken to improve legal as well as a regulatory framework for the key sectors in the economy.

So, What is a Real Estate Boom?

BOOM is the situation where the prices of real estate start rising at a higher-than-normal rate if there is a huge increase in the market price of real estate property.

Over the last 8 years between 2007 and 2015, the average price of a 1-3 bedroom apartment in Kenya has risen from 5.2 million shillings to 13.4 million shillings, rendering into a compounded annual growth rate (CAGR) of 14.5 percent. as revealed by Cytonn Report.

The last decade has seen phenomenal investments in real estate of Kenya. Projects worth billions of shillings have either been accomplished or are under construction. The boom has not escaped the notice of international players who have found the country to be ideal for their investments.

Real Estate Trends In Kenya

According to Deloitte real estate trends 2018, the following are the trends that will impact the global real estate industry this year. As the trend continues to pick up, the real estate in Kenya can only expect its growth in leaps and bounds in 2018. Some of the latest trends seen in kenyan real estate are as follows:

Co-working Modern spaces

Co-working spaces have met most of the ingredients of the modern workplace, allowing corporates as well as independent freelancers to thrive.

Smart buildings

In Africa for instance, countries like Tunisia, Ghana and Kenya had buildings receive global standard ratings on the greenness global index. The demand for smart buildings will create a new twist in the real estate market in Kenya for sure.

Block chain

As the block chain technology moves towards maturity, there will be more beneficial and revolutionary applications in real estate transactions as well.

Fintech

With the increasing availability and innovation in fintech technologies, there will be more solutions to the financial challenges in the real estate sector.

What is a Real Estate BUBBLE?

A real estate bubble refers to a periodic event characterized by rapid increase in value and hence prices of property to levels that are affordable by the population, which results in lower demand hence prices declining tremendously. This means a bubble would occur if there were a rapid rise in land and housing prices, to the extent that the properties retail at several times their worth.

A real estate bubble typically occurs in well-established real estate markets.

In 2016, a boom took place in Ruaka, Kiambu County, where land prices almost doubled with an eighth portion of an acre going up from Sh 8 million in January to Sh18 million at the end of the year.

One of the significant reason for a Bubble to occur is increasing demand that supersedes supply, which eventually leads to a property bubble as the prices rise to levels that are unaffordable by the public.

Another significant probability for an increase in real estate prices, especially around Nairobi and other urban centres, is attributable to demographic factors such as a high population growth rate and rural-urban migration.

Thus, there is no bubble in the Kenyan market. Instead of rising demand for land, fluctuating marketing values, and the rapid price increments showing the rising phase of the Kenyan real estate market that is characterized by low supply, high demand leading to increasing prices.

To sum up, Kenya is one of the real estate investment destinations of sub-Saharan Africa. The 44.2m-people country and its 4.2m-strong capital Nairobi acts as a gateway to a regional East African market, which is approaching 150m people. Thus, the industry has been accelerating at a rapid speed and making a substantial contribution to the country’s GDP growth figures on the back of rising demand for multiple-use and residential developments.

Domestically, there is an increase in population,

incomes are on the rise and economy has been outperforming and based on these fundamentals, it is hardly surprising that Kenya, like much of the sub-Saharan Africa region, is arousing the interests of a range of international funds and institutional investors. For professional advice on property market contact :HayeroneReal Estate Property Development Company Kenya

Real Estate Market Report – Residential Property

High Housing shortage

More than 200,000 homes need to be built a year, but only 50,000 new units are being built annually, leaving around 150,000 Kenyans un-housed every year with middle-income earners in urban areas most affected.

In Nairobi, more than 67% of all residents live in informal settlements. The proportion of owner-occupied households in the urban areas currently stands at just 18%, compared to 82% in rural areas. To fill in the gap HayerOne has come up with 4 Bedroom Apartments For Sale in Nairobi – The MARQUIS

Investors and families that have been looking for property to buy should look for 4-bedroom listings, especially houses and town houses. These two property types have experienced a decrease in the average ask price (sale price) by 27.30% and 16.45% respectively.

(source: data-fintech)

Real Estate Market Report – Residential Property Real Estate Market Residential Property forecast real estate residential property kenya

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