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Kenya’s election uncertainty provides investment opportunities

Africa Globe

Elections can change a country’s economy, especially during the post-election due to the possibility of political instability, government policies and even changes in investor’s confidence. The whirlwind of events that Kenya has gone through since August 2017 has not necessarily had the best impact on investors especially in the real estate market.

Most investors have adopted a “wait and see” approach whilst deciding whether to hoard their money instead of investing it throughout this period. Unknown to them is that the best time to invest in real estate is during the uncertainty period. Business Daily reports that “while the overall investment environment in the country has been disrupted, real estate remains a resilient asset class that has delivered stable and attractive returns at 20 per cent in the past five years.

It is better to invest during uncertainty when the prices are down as compared to a stable or bullish environment, where demand and prices are used to increase.

According to Data Fintech’s Investment report, Syokimau has been dabbed as the “next millionaire’s playground” which has experienced a drop in both sale and rental prices. The median sale price of 2-bedroom apartments has dropped by 2.1% to Ksh 4.6 Million, while rent prices of the same property has dropped by 4.2% to Ksh 23,000 between Q4 2016 and Q4 2017.

Turning to Imara Daima, within the similar period (Q4 2016-Q4 2017) the prices of 2-bedroom apartments dropped by 6.7% to Ksh 7 Million, while rent prices have remained stable at Ksh 40,000 despite the political squabbles over the last couple of months.

For an investor who is willing and ready to make comfortable returns, the best option between the two would be Imara Daima. Here is why. Throughout the year under review, demand for 2-bedroom apartments has been higher than those in Syokimau. Additionally, a one-year rental yield is 6.4% in Imara Daima as compared to 6.1% in Syokimau.

Read more here: Investment 101 – Real Estate – Imara Daima Soykimau