6 Key Real Estate Drivers in Kenya in 2023
Kenya’s real estate industry saw steady growth in activity in terms of property transactions and development activities.
REBP
In 2022, Kenya’s real estate industry saw steady growth in activity in terms of property transactions and development activities. Property selling and rental prices are noted to have continued to soar.
However, the Kenya National Bureau of Statistics (KNBS) report mentioned that despite the growth in 2022, which grew by 51%, it was 2.0% slower than the 7.1% growth witnessed in 2021.
In 2023, the Real Estate industry should expect the following key drivers:
1. Affordable housing initiative
The government is determined to ensure they gear their focus on affordable housing projects which will provide decent housing to Kenyans. Through the Affordable Housing Program (AHP), there are at least 30 ongoing affordable housing projects estimated to deliver 200,000 units annually.
2. Infrastructural development
The government has continued to launch and implement various infrastructure projects, with an aim of improving the country’s economic status, as well as positioning Kenya as a regional hub. This is expected to enhance the performance of the sector by opening up areas for Real Estate development.
3. Recovery of the hospitality sector
With the various mergers and acquisitions that have taken place in the hospitality sector in recent years, it shows investor appetite and confidence in a bid to gain market dominance coupled by the recovery of the sector away from the pandemic lockdown.
4. Positive demographics
According to the World Bank, Kenya is noted to have relatively high urbanization and population growth rates averaging 3.7% and 195 compared to the global averages of 1.6% and 0.9% respectively. This, therefore, will continue to provide sustained demand for more housing units in the country.
5. Focus on mortgage financing
The Kenya Mortgage Refinance Company (KMRC) is noted to continue to advance its efforts to make homeownership more accessible to Kenyans by providing long-term, low-interest home loans to potential home buyers through financial institutions.
6. Aggressive expansion in the retail sector
In the past year, the sector saw rapid expansion by both local and international retailers such as Naivas, Carrefour, and Quickmart. According to Nielsen Report, Kenya has ensured its formal retail stands at 30%.
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