| So where
exactly does the truth lie and what does it matter anyway!?
Well, if Kenyan
real estate agents and marketers can prove to the wider world that the
property sector in Kenya is interesting and offers an investor strong capital
growth potential as well as substantial rental yields, then the property
market will of course see a strong flow of inward investment.
Depending on
which side of the fence you’re on, this investment could either lead to
a prolonging of the boom or the creation of one if, as many people suspect,
local property investors are actually making up evidence that a boom already
exists!
So what evidence
actually exists to suggest that investing in real estate in Kenya is a
wise move to make?
Well, for example
in Nairobi where demand for property is intense, certain upmarket areas
of the city have seen property prices increases of up to fifty percent
in the last two years alone…and that’s a fact.
Marketers
are using this fact to prove their argument:
Property in
Kenya is booming – price growth is intense and the rental figures being
charged for some of these properties in the most desirable areas are on
a par with major cities around the world.
But constructors
and those in the negative camp highlight the fact that this growth is only
benefiting an elite few– i.e., those with the money to own such properties
and afford to rent them out to enjoy the income from the rent together
with the growth in the underlying price of the unit.
Basically because
the increase in property prices is limited to certain areas of the country
and is only benefiting the higher income sectors of society, it is being
argued that this cannot constitute a boom. A true boom would positively
affect the lower, middle and upper end of the market –but is this just
a question of semantics?
On the one
hand yes. There’s no denying the fact that investments made into certain
parts of Kenya will net their owner impressive rental yields and a good
level of annual growth. But on the other hand that does not mean
that any investment made into real estate anywhere in Kenya is a safe bet
and one that will ride the crest of the boom’s wave and guarantee the investor
maximum profit.
So the argument
is valid -but the plain and simple truth is that investing in property
in Kenya can return an investor impressive rental income and substantial
capital growth returns – but as with any emerging real estate sector in
the world, an investor has to do his/her due diligence on which areas of
the country actually have the necessary demand to sustain profitability.
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