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2022 Kenya Real estate predictions (including the impact of the 2022 General Election)

2022 Kenya Real estate predictions (including the impact of the 2022 General Election)

It’s hard to believe that 2021 is over.
But alas, here we are, and it’s fair to say that it’s been a very interesting
year for real estate. As we head into 2022, here are some trends that
we
anticipate seeing in the real estate sector in Kenya that you
 should know about.

 

1.      Impact of
2022 polls on the real estate sector.

 

Every 5 years, the economy takes a dip due
to the
election
cycle as political campaigns take centre stage
.
However, real estate performance has remained relatively stable over the
previous election cycles.  Most investors
and businesses usually
hold back on investments to await the outcome of
the polls
.  

As we run up to the elections we anticipate prices may flatline as investors
adopt a wait-and-see attitude.  We may
thus experience a reduced number of transactions. A price fall in the sector is
unlikely even if the number of transactions reduce.

We may see increased infrastructure development as the incumbent at the
counties put up roads as a plan to woo voters and seek reelection. We may also experience
increased expenditure on infrastructure by the national government and this will
improve real estate sector performance if done right.

2.     
Growth of Affordable Housing.

As mentioned above, with elections
coming up, we anticipate the economy to contract. Lending institutions limit
the credit available due to uncertainty over the economy.  If the economy contracts, more Kenyans will
opt
for affordable houses as their purchasing power will be lower. While the government and its partners will continue
the Affordable Housing scheme, the demand is high, and the government cannot meet
all the demand.

This
means that while the option of cheaper government houses may be available to
Kenyans, many will miss out because of the high demand.
Opportunities remain for developers
to provide affordable housing to plug the gap.

3.      Short-term rental demand will continue to boom.

 

We have seen
the growth in short term rentals through Airbnb and other private forums.
While hotel business may pick up in 2022, travellers may still be drawn to
short-term rentals, where they can spread out and have a home all to
themselves.
For those
who want to run and maintain furnished houses, the demand for the same is bound
to increase in 2022.

4.     
Office
buildings will start getting fuller

 

Most office buildings have largely sat vacant since the
start of the pandemic.
In Kenya, more and more people are getting
vaccinated and offices are now nearly fully open.
In 2022, we anticipate most of companies will require their
staff to fully work from the office or at least demand a specific number of
days when staff must be in the office.

 Reopening of offices will bring demand back for
agents dealing with leasing and selling of commercial/office property.

5.     
Construction of Smaller Houses 

A report by the Kenya National Bureau of Statistics (KNBS) in
2020 revealed that developers in Nairobi are building smaller houses such as
bedsitters, single rooms, and one-bedroom houses to beat the demand for these
house units among city residents.

As millennials and Gen Z enter the market, the demand
for smaller houses will continue. Developers should thus ensure they are
planning with this trend in mind in case they are targeting
millennial buyers
.
Millennials prefer small
size houses as they realize the benefits of smaller homes: less maintenance, fewer
expenses, and more energy-efficient. For new builds, millennials prefer a
well-designed, smaller home that’s functional for their lifestyle.  As a developer, remember to make the home ecofriendly.

6.     
Continued Growth of Satellite Towns

Satellite towns will
continue being attractive in 2022 as residents try to move away from the city.
Areas like syokimau, Rongai, Ruaka and Kajiado will continue to grow.

Another
notable trend is the increasing demand for houses within satellite towns neighbouring
cities. This demand has seen the prices of land in the towns rise as developers
seek to venture into real estate in those areas to match the growing housing
demands from Kenyans.

7.     
Congestion in Leafy Suburbs 

Areas such as Kileleshwa, Kilimani, Hurlingham, and Lavington
which were previously considered high-end areas will continue to witness the
construction of
high rise buildings as
bungalows give way.

Real
estate company Knight Frank in February 2021, stated that wealthy Kenyans
were deserting rich suburbs like Runda and
Kitisuru due to the influx of new residents in the areas. 
We anticipate to see continued
exodus in 2022

Will 2022 be a solid year for real estate investors?

 

Only time will tell what the year
will bring. But it’ll be interesting to see how well these predictions pan out
as a new year unfolds.



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