Looking at the Kenyan real estate market objectively, you might find it rather confusing. If you judge the market by how many people need homes versus how many are available, it would seem to be an industry in which you should definitely invest. Given the size of the Kenyan population and the amount of housing available, there is still a large gap. However, the problem comes with the prices. No matter how large Kenya’s need for housing is, that housing has to be affordable. Currently it is not – even the middle classes are finding it hard to find homes that fit their budgets.
Conducting a real estate review in Kenya
The cost of living in Nairobi is already high by African standards. Based on the current home prices and the salaries earned by average middle class employees, being able to afford a mortgage is very difficult for most – and property prices just keep on rising. It is interesting that Kenya has a very low rate of people taking up mortgages. There are reportedly less than 20,000 in the entire country. Interest rates on mortgages are high and it is just not possible for potential homeowners to service these loans. What this means is that developers are going to have to start lowering their prices or they might even sit with unsold stock on their hands.
The situation is particularly difficult when it’s considered what a large demand for affordable housing exists. When prices of homes increase by about 400% in less than 5 years it is obvious that a boom situation has been created. What is also clear is that the boom must inevitably be followed with a bust. This is particularly true in that the average Kenyan family’s income hasn’t increased by nearly the same percentage.
For now, though, is still in full force. People are borrowing whatever money they can find and are even cashing in their pension schemes to get into the real-estate market. While prices keep rising, it’s seen as a remarkably good investment opportunity. Even poorer people performing manual jobs are getting together to do crowd funding of a property – this is how anxious everyone is to get a piece of the action. The danger is that if prices do start to fall, a large number of people who have risked their life-savings will find themselves having lost more money than they can possibly afford.
Rental prices in Kenya
What also happens in a time of burgeoning house prices is that fewer people are able to buy homes and more are forced to rent. Property owners take advantage of this situation to push rentals up sky-high and this is exactly what is happening. Two other things are starting to happen. Some Kenyans are leaving Nairobi and returning to their home cities or villages where prices are not as exorbitant, or they are moving entire families into minute bachelor or one bedroom apartments. Affording larger spaces is becoming impossible. What seems likely, then, is that developments at the high-end of the market are likely to remain unsold and unrented. As a result, anyone thinking of investing in Kenya should make a point of staying current with real estate reviews.
Looking at the Kenyan real estate market objectively, you might find it rather confusing. Visit to website know more about real estate marketing in Kenya.
