There has been a debate over the last few years if the bubble in the real estate industry in Kenya is about to burst. I tend to disagree because of a few reasons which basically rely on the demographics of Kenya. Unlike the traditional norm of buying land and building a house, most people particularly the youth, now prefer buying houses in Nairobi.
Urbanization
One of the key factors influencing the demand for housing is the old age tale “rural to urban migration “because people like to live, invest, work and play within their proximity. According to the census report released in August 2019, it shows a tremendous growth in population in Kenya, with Nairobi County leading with 4.3M and Kiambu County being the second largest with a population of 2.4M. With such demand for housing, wouldn’t Real Estate in Kenya be booming? After all, everyone needs a roof over their head.
Gross Domestic Product
The Gross Domestic Product growth has had a parallel influence on the real estate industry attributing its growth ratio from 4.9% to 5.5% in the last two years. The increase of the GDP has also attributed to consumers’ growth of income allowing them to afford apartments for sale or rent within the Nairobi County.
New Trends and Concepts in Real Estate Kenya
Nonetheless, the Real Estate Developers have adopted the concept of building property vertically due to the high cost of land in Nairobi. This allows them to demolish previously built houses and put up high-rises to meet the needs of the consumers. A good example is the Wilma Towers-Manhattan Style by Vaal Real Estate which is a twin tower development built in new era architecture offering modern amenities including an outdoor running track and kid’s play area. This is ideal for the citizens who would not want to move to satellite areas.
Mortgage Terms vis a vis Flexible Payment Plans
Moreover, the bubble would burst if the Mortgage lending rate was higher than the repaying rate by the consumer. As it stands most people shy away from taking up mortgages because one ends up repaying three times the amount of money they borrowed. Do your quick math and tell me how that sits with you.
Real Estate Connoisseurs prefer flexible payment plans with cash installments staggered over a period of time as specially offered to them by developers such as Vaal Real Estate. These are favorable to those looking for houses in Nairobi, as they do not attract any interests whatsoever. Why do you think most pre-sales are done when a project has a payment plan?
If a developer like Vaal Real Estate gets its product mix right by giving the consumer the right price, high-quality finishing, modern amenities, and a good location, then this would allow them to meet the needs of the clients.
The demand for apartments for sale in Nairobi’s green suburbs has never been higher; you just need to find that developer that will check your boxes in your search criteria.
-Sumeiya Omar Property Sales Supervisor, VAAL Real Estate