According to Cytonn Investments, the real estate sector in Kenya will continue to grow into 2022 after a positive trajectory in 2021. In 2021, the Real Estate Sector in Q3’2021 grew by 5.2 percent, 0.3 percentage points higher than the 4.9 percent growth recorded in Q2’2021.

Here are 6 drivers that will tailor the growth of the real estate sector in Kenya:

Infrastructural Development:

The Kenyan Government has been aggressively supporting and implementing various infrastructural development projects, with a major focus on the transport sector with the key beneficiaries being road construction.

This is evident in the country’s road network coverage currently at 161,451 kilometers and valued at over 3.5 trillion shillings as of 2021, signifying heavy investment towards the sector, according to the Kenya Roads Board’s Annual Public Roads Programme 2021/2022.

In general, infrastructure development continues to be a factor supporting the growth of the Real Estate sector through opening up areas for Real Estate investments.

Positive Demographics:

Kenya has relatively high urbanization and population growth rates of 4.0 percent p.a and 2.3 percent p.a, against the global average of 1.8 percent p.a and 1.0 percent p.a, respectively, as of 2020 according to the World Bank, driving increased demand for Real Estate developments.

Expansion by local and International Retailers:

Aggressive expansion by local and international retailers such as Naivas, QuickMart, and, Carrefour, taking up new and previously occupied retail spaces by troubled retailers such as Tuskys and Shoprite continues to support the retail sector.

Hotel and Serviced Apartments Operations:

The lifting of flight travel bans in the second half of 2021 led to an increased number of visitor arrivals into the country.

This in turn led to improved performance of serviced apartments, and hotels also resuming full operations. We expect this to continue driving the performance of serviced apartments in 2022.

Focus on Affordable Mortgages:

Lending financial institutions such as banks and SACCOs such as Gulf African Bank, NCBA Bank Kenya, Co-op Bank, and Stima SACCO have continued to demonstrate efforts in supporting homeownership through offering affordable mortgage schemes with bespoke terms to clients in a bid to increase mortgage uptake.

KMRC also announced a 143.5 percent increase in mortgage loans to primary lenders to 7.0 billion shillings from 2.8 billion shillings. These initiatives demonstrate a continued focus on increasing mortgage accessibility and uptake to individuals.

Statutory Reforms Supporting the Real Estate Sector:

The establishment of statutory laws by the government aimed at aligning Kenya with international standards in an attempt to address the shortcomings of previous Acts is expected to streamline Real Estate investments and transactions, e.g. the Public-Private Partnership bill-2021.

source : https://sokodirectory.com/