Kenya has one of the fastest growing economies in Africa providing a favorable market for the real estate sector. There has been rapid urbanization which is the leading cause for high demand for residentials, as the middle-class population grows.
According to Cytonn report, in H1’2023, the real estate sector recorded improved performance, attributed to increased Real Estate property transactions and developments. The residential sector recorded improved performance with a 0.2% points y/y increase in average total returns to 6.0%, from the 5.8% recorded in H1’2022.
The commercial office sector recorded average rental yields of 7.8% in H1’2023, representing a 0.4% points y/y increase from 7.4% recorded in H1’2022.The retail sector recorded average rental yields of 8.2% in H1’2023, representing a 0.4% points y/y increase from 7.8% recorded in H1’2022. The land sector recorded an average annualized capital appreciation of 4.5% in H1’2023. (Cytonn,2023)
The residential segment continues to dominate the market with a projected market volume of KES US$618.80bn in 2024. It is also estimated that the market will experience an annual growth rate of 3.84% from 2024 to 2028 resulting in a market volume of KES US$811.40BN by 2028.
Some of the key reasons for the surge in the Kenyan real estate market are:
High population growth and urbanization leading to high demand of both residential and commercial spaces.
Favorable policies, focus on affordable housing and infrastructure projects by the government.
Increased foreign investor confidence and appetite for Kenya property market particularly, hospitality, retail and industrial sectors.
Economic recovery which has led to reopening and expansion activities especially in the hospitality sector.
The future of Real estate in Kenya is promising, there is no better time than now to start your investment journey. Afriscape Solutions offers you a wide range of services as we help you navigate through the market easily and with confidence.
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