Let us evaluate how the Kenya property market has changed since 2003. We can ask, how did the property market look like then?
The property market has changed tremendously since 2003, we’ve seen land values go up tremendously, we’ve seen a whole shopping centre culture develop over that time, we’ve seen the emerging middle class grow fantastically. The skyline of Nairobi has been completely transformed by new exciting office buildings, shopping centres, and apartment blocks.
Nairobi Residential Sector
Nairobi has really become a regional hub over that time and it’s been a fantastic thing to see. Let’s look specifically at the residential sector, what have been some of the improvements to date?
Well I think access to housing generally has improved. It’s not good enough but we’ve seen a lot of housing particularly at the affordable end of the spectrum, which has enabled the one auntie to move into formal accommodation, formal housing. At the bottom of the market that’s been great.
At the top of the market again we’ve seen huge amounts of apartments being built by developers both international developers and local developers as well. So we’ve seen that skill set has come up, local developers have improved methods and made much more affordable housing in the middle market as well.
Office Space in Nairobi
Office space has also evolved, I mean we are having a lot of buildings that have additional floors. They have quite a different feel compared to 2008. Let’s talk about Office Space.
Well, the reason the office sector has grown so dramatically is that Nairobi is a regional hub. so it’s a two-tier market, we’re seeing offices in Nairobi that are occupied by companies that are not just running their Kenyan business from that office but also their East African business and in some cases even their Central African business as well. So,
Nairobi’s office market is much bigger than you would expect to find in a city with a population the size of Kenya because of that regional market.
We have the new exciting global corporate like coca-cola, Google people and Microsoft having their headquarters here so they’ve raised the bar. They require very high standards of office accommodation and that increase in standards has spread right across the office sector.
Kenya Property Market Vs London / UK Property Market
Let’s look at the property market in the UK and you look at Kenya what are some of the differences and do you think Kenya is actually catching up?
I think the biggest difference particularly in the residential market is the availability of financing for young people to buy homes It’s a tragedy here in Kenya, that, it is so difficult for young people to get access to mortgage finance to buy their properties.
Let’s do a case study: In my early 20’s in London in I bought an apartment on an 80% mortgage. let’s say for the sake of argument that property grew in value by 15% in the time that I had it. that 15% belonged to me that was my share of the economic growth of London.
Now the same thing is happening here in Nairobi. Property values are going through the roof but most people are renting. If you rent, you miss out on that. if you can somehow buy that property yourself you own it if it’s value goes up by 20 percent. Your share of Nairobi’s growth is that 20 percent, the increase in that house nobody can take that away from you, it belongs to you.
The best advice in relation to the property sector in Nairobi
Getting on the property ladder that’s the most important thing. it’s really difficult to do in Africa, with the cost of living being so high. But that would be my advice.
People talk of the real estate bubble in Nairobi. In My opinion and against the research of other realtors like Cytonn and Hassconsult, the boom in real estate has been facilitated by the regional changes. These changes include events like Construction of roads, malls, railway line development and growth of certain centres. But in the real sense, there is no real estate bubble. Buy property now and you will have invested before the property prices go up.