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Kenyan real estate sector overview

The Kenyan real estate sector has been vibrant for the past decade or so. To many Kenyans, the definition of wealth is land, buildings, vehicles and any other physical assets. This is why land is such an emotive issue in the Kenyan socio economic and political spheres. The real estate sector has been experiencing a boom from the lowest moments during the 2007/2008 post election violence. It is a fact that many Kenyans think of acquiring a land or a building as their first investment whenever they get a financial windfall.


To this end, banks have realized this lucrative sector and are offering mortgage products to attract Kenyan lenders. Kenyan Housing finance Corporation has been the leading mortgage lender in country since independence. Some of the other major Kenyan banks that have rolled out mortgage loan products include KCB, the Barclays bank, and Standard Chartered among others. Many middle class Kenyans now prefer to purchase their own homes rather than be tenants for ever. In Nairobi, the major real estate sector has been in Kitengela, Ruai, Kitisuru, Mombasa Road towards Machakos. In fact, some wealthy Kenyans are now migrating from the leafy surbubs such as Lavington, Karen, Muthaiga to the city outskirts.

Due to an acute demand for real estate in Nairobi and its environs, rent and land prices have immensely escalated. This has tended to push city residents to downgrade their estate environs. However in some cases, the rent has gone down dramatically. For instance, office space in Nairobi’s CBD is now cheaper as most offices have moved to Westlands, Upperhill, Hurlingham and other upmarket areas. The move has been necessitated by the need to avoid traffic jams and congestion in Kenya’s CBD. However, too much investment in the real estate could lead to meltdown, as Kenyan banks apparently increase the uptake of loans. As happened to the American financial crisis, this situation could be a major problem should the debtors default enmasse.

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