Real estate is land, including the air above it and the ground below it incorporating any kind of structures that are erected on it. Real estate cuts across the board from residential houses, commercial offices, entertainment spots like restaurants, retail outlets, industrial buildings such as factories and government buildings. The key players in this sector are landlords, developers, builders, real estate agents, tenants and buyers.
Real estate in Kenya is a lucrative business this is evident in the constant popping up of buildings in all parts of the country. Despite being ranked poorly in the global market it is ranked the fourth best in Africa the brisk growth can be attributed to the fact that
is showing transparency. The 2012 Global real estate transparency index by a
London-based financial consultancy Jones Lang LaSalle has ranked Kenya in the
semi transparent category being ranked 65 out of 97. With Kenya Nairobi
being one of the best business hubs in east Africa
it is attracting a considerable amount of foreign investors.
With many people in the working class and the middle class opting to owning their own homes and places of business in order to put an end to paying rent, there a number of options available to them. These include mortgages, buying already built houses or building a house from scratch. There implications and conditions that come with all of the above sited ways of acquiring property. Building a house may prove to be a cheaper way, but it is highly influenced by the rise of prices of prime land which at the moment are sky rocketing. Renting of houses is a cheaper option compared to buying a house which can prove to be quite costly .And even though financing of mortgages is cheaper in Kenya than countries in east Africa many people are forced to be tenants other than buyers and builders.
REAL ESTATE SITUATION IN KENYA: INVESTMENT OPPORTUNITIES
There is introduction of new regulations like the recently adopted one by the Retirement Benefits Authority, which now permits pensioners to use 60 percent of their benefits as security when taking mortgages. It is also worth noting that the mortgage industry has shown steady growth with the total portfolio increasing by 19 billion in 2010 according to a report done by central bank and World Bank. Other developments in this sector also include the condominium law that grants permission for partial ownership of property which has seen investors couple up to acquire property that they would have otherwise not afforded on their own.
A recent property survey by Hass Consult showed that property prices have risen by 30 percent from 2004 to 2009. Despite all this the one major factor that favors the growth of real estate in
is high returns at minimum
has an edge because of effectiveness and quick returns to the investors making
investors flood this market. Kenya
Housing finance director Frank Ireri attributes proper investment and government regulation coined with availability of capital as what puts Kenya ahead of other countries in Africa in terms of property investment. This offers investors good returns because of high demands of housing. In east Africa,
Kenya is without a doubt attracting more
investors reason being that Kenya
is a democratic country compared to countries like where investments are
controlled by the president. Uganda ’s
real estate sector remains dormant and static because of the rigid government
policies that are scaring away investors from other countries as the country
cannot be developed by its citizens alone. Tanzania being the democratic country
that it is allows people irrespective of their origin to own property this
great achievement being a product of the new laws that have been adopted Kenya
It has not been a smooth ride for the real estate sector as there are factors that affect it namely:
· High rate of urbanization estimated at 4% p.a.
· Lack of serviced land.
· Lack of affordable housing.
· Squatter and slum settlements.
· Private sector has focused on providing housing for middle class and high class income groups
· Lack of proper investments for housing in the low and middle cost housing for private and private sector.
That not with standing there are a number of things that influence real estate investments and they are:
· Political stability
· Foreign investors
· Economic growth
· Tourist attractions: that will make tourists curious and interested in investing permanently in
· Fair property prices
· Improving infrastructure
· Cultural incentives to owning homes
Realty is currently a sector that many Kenyans are delving to and this is attributed to its high returns within a short time.