The real estate market plays a very important role in any economy. It is known to have a dramatic multiplier effect and is a key economic indicator.
The Kenyan real estate market has been experiencing a boom in the past ten years and the latest findings have shown that the trend will continue into the foreseeable future. Luxury homes in Nairobi, Mombasa, Malindi, and Lamu ranked among the top-notch residential property markets in the world for attaining the highest rise in prices among properties surveyed globally in 2011. Nairobi was reported to have had the highest growth rate with 25% price increase for top-notch residential properties, followed by Kenyan coastal properties in Mombasa, Malindi and Lamu with 20% price growth.
In 2010, growth was higher than expected at 5.6 percent, and this rate is expected to be maintained over the medium term. If growth accelerated to 6 percent, Kenya could reach Middle Income Country status by 2019.This means Kenya is at the threshold of a major demographic transition and is urbanizing rapidly. This social and economic transformation needs to be managed well to catalyze its development impact. This increase in urbanization will affect the demand for housing significantly.
According to UN Habitat Statistics, E. A is the fastest urbanizing region in the world with its urban population expected to double between 2007 and 2017. Nairobi is one of the fastest growing cities in the world. A Recent report by the Kenya National Bureau of Statistics shows that demand for real estate in the urban areas in the last ten years exceeded supply by more than five times. Another reason to anticipate significant growth in the real estate market in the coming years is the dropping interest rates.
Lower rates have spurred an uptake of mortgages which have in turn fueled the impending housing market boom. In June 2013, the CBK lowered its rate to 8.5%. Statistics show however that despite lower interest rates, less than 200,000 Kenyans have mortgage facilities. Only 6% of Kenyans own their own homes. Mortgage lending is still accessible to only a minority. In 2012, only 1.1% of the top 60% income earners in Kenya have a mortgage.
This means that there is still a huge deficit in the housing market. Statistics indicate that the demand for housing, which has possibly led to increases in house prices, has been on the rise at a faster rate than the number of houses available or under construction. The estimated number of houses constructed annually is about 30,000 whereas the demand is estimated at 150,000 as per the National Housing Survey was done in 2013). In Nairobi, the demand for real estate is at an all-time high. With improved infrastructure like the Thika Superhighway, access to utilities, growth in information technology, the performance of the sector continues to grow. A major innovation has been the multi billion – dollar gated communities and mini cities coming up. This has spurred the growth of the sector tremendously. Hence property in these communities has increased in value. Another boost to the sector is the introduction of Real Estate Investment Trusts by the Capital Markets Authority.
This will enable real estate companies be listed in the Nairobi Securities Exchange. It will also enable small investors to have access to an otherwise prohibitive market. We at Saif Properties are bridging the gap and making it easier for you to own a home despite the crazy mortgage rates in the country. We offer a unique payment plan contact us today and you get to enjoy the 0% interest.