As of 2016, Real Estate contributed to about 13.8% of the national GDP in Kenya. This figure is constantly changing particularly in the face of the increasing national population and investments in the industry. As more Kenyans make an economic migration between asset and financial resource classes, particularly from lower class to middle class, and also from lower middle to upper middle, as well as the general expansion of the middle class, the demand for middle-class residential units increases. Most of the middle class residential units range from 1.5 million to 6 million Kenyan shillings at the point of purchase. This necessitates the need for expansions of the residential properties market to cater for economic mobility within the classes.
The growth of the middle class has also led to development of suburbs just outside the CBD. Locations such as Westlands, Upperhill, and Kilimani among others which were traditionally residential with little commercial hubs, have now amalgamated into a mix of both highly sought after commercial and residential residential properties. Property prices in such areas are on the rise as apartments replace bungalows and mansions, and also as land owners and land use change. The trend is replicated in major towns and cities of Kenya as well: the emergency of skyscrapers in what were once relatively wealthy suburbs.
Construction and expansion of residential units are not just in middle-class regions, but also among the wealthy residential areas. Locations such as Karen, Runda, or Nyari, are just among the locations where the traditional uber wealthy lived. As upward mobility occurs, a lot more people come to money, such that even those locations that were originally quite exclusive are beginning to absorb the new money and are creating room for the new entrants.
Despite the ongoing constructions in affluent locations as well as the construction of middle-class accommodation, there still remains a bigger demand for affordable housing for many Kenyans. Official government reports record that there is an accumulated deficit of about 2 million units of housing required for Kenyans. Therefore, in spite of the population increase, access to finances or home funding, real estate companies still need to look at affordable ways in which houses can be made accessible to the many Kenyans who are in need of housing.
Average annual housing demand in the whole of Kenya is about 250,000 units a year. The availability of such an opportunity gives any individual, or organisation interested in investing in real estate a chance to dabble in the capital intensive but quite lucrative industry.
And as 2022 enters its second half, Kenyan elections loom, government instructions regarding covid-19 protocols are reinstated and a lot of citizens will be reviewing their housing needs. Some due to excess cash in the inflating market will seek to offload on property while others due to loss of livelihoods will seek to move to smaller units or even cheaper houses.
The possibilities for the market are endless. And this is why liko is committed to anyone who would like to be a part of the industry. Whether as an agent or as a franchise owner or as a buyer or a seller. We are able and capable of engaging in the processes involved in the real estate field.