Last month, CNBC held a discussion to try to figure out what was behind Kenya’s Real estate market boom. The real estate industry in Kenya has grown almost tenfold in the last 15 years, yet owning a home continues to be out of reach for most Kenyans.
The report advised that all investors who plan to build homes or to invest in real estate that Kenya would be the place to do so. It went on to warn readers that the housing was unaffordable and unavailable, stating that the supply was outstripping the demand.
Real Estate market data by Data Fintech continues to support these findings. According to the analysis, there has been a drop in effective demand for residential property in Kenya by 27.2% in June 2017 as compared to January 2017. Tenant interest has dropped significantly over the last six months but the number of residential units increasing by 21.6%. There is expected to be a higher number of units in July and August 2017.
Commercial property is facing a similar situation with effective demand dwindling by 56.5% in the first half of 2017 and rent in certain areas such as Kilimani decreasing by 2.4.% between June 2016 and June 2017. The number of commercial properties listed has increased by 3.11% over the same period. Land also performed poorly. The number of listings are down by 8.6% while effective demand also dropped by 33.7% between January and June 2017.
Interesting to note however was the growth of land value in Ongata Rongai. A comparison was done, between Land in Ongata Rongai, the NSE and government bonds over a 12 month period (between June 2016 and June 2017.) If an investor invested 100Kshs in land in Ongata Rongai they made a total of Ksh 119. The median price of land in Ongata Rongai grew from Ksh 14 Million in June 2016 to Ksh 16.7 Million in June 2017. That is a 19% surge in median price.
For investors looking to make a guaranteed ROI, this would be the best place to invest in. Demand for land in the area is high with the growing population and is projected to remain on an upward trend.
The study has been recognized by Data Fintech, a Kenyan consumer data broker, based on data collected on BuyRentKenya, the leading online Job market platform in Kenya.
Read more here: BuyRent DF Real Estate Global June 2017