Buying property in Kenya

An upcoming property in Nairobi (Image/PropertyPoint)

Kenya, the largest economy in East Africa, is currently experiencing a record demand for property in its major towns.

The rising demand is as a result of affordable interest rates by mortgage providers and expectations of substantial economic growth in Kenya.

In a bid to keep up with the current housing demand, property developers are working overtime, with new development projects being launched at an unprecedented rate.

These new developments are not only expected to fetch high rental or sale income on completion but they also bring with them the much needed boost to the country’s infrastructure.

I will evaluate the top three cities in the country to help inform your choice of location when buying property in Kenya.

1.) Nairobi – Kenya’s capital, Nairobi is the hub of the real estate development in the region. The continuing rural-urban migration has led to a sharp increase in Nairobi’s population thus pushing up the demand for housing. As a result developers in the city’s estates, including exclusive neighbourhoods of Runda, Karen and Ridgesways, are enjoying boom time with apartments and high rises being put up as fast as they are being occupied.

Thanks to the high demand, prices of property in Nairobi has sharply escalated in the last three to five years – with some areas seeing over 300% price increase. Some of the most affected areas are Karen, Parklands and Kilimani. An eight of an acre in Parklands that was selling for about Sh20 million in 2005 is now going for Sh50 million.

Rents have also skyrocketed. At Nairobi West, for instance, a three-bedroom house whose monthly rent was Sh25,000 two years ago is now going for between Sh30,000 and Sh38,000.  In my view the property boom in Nairobi is set to continue as long as rural-urban migration continues.

2.) Mombasa – Mombasa’s property market has come of age as evidenced by the outcome of the first Mombasa Homes Expo held in the coatal city during the Easter weekend. The expo that attracted both local and foreign visitors saw the exhibitors making brisk business selling plots and other properties. A good example is Myspace Properties, one of the event’s organisers, who sold a house to an Italian tourist for a whopping Sh182 million.

Buying a property in Mombasa is bound to give good return on investment as a majority of people chosing to go on holiday in the coastal city have discovered it is better investing in a holiday home than staying in hotels. Most Popular areas among developers are Shanzu, Kisauni, Nyali, Kizingo, Majengo and Mtwapa where high rise houses have already been put up.

The planned port of Lamu as well as expansion of the Mombasa port is expected increase business activity in the coastal region- leading to a sharp rise in property prices.

3.) Kisumu – Kisumu, christened the Lakeside City, is also a hot propety spot in Kenya with investors scrambling for vantage positions for the apartments to overlook Lake Victoria, the second largest fresh water lake in the world.

New developments across the up-market areas of Kisumu consist of flats and apartments – a departure from the once dominating mansions and bungalows. The leafy surburbs of Milimani, adjacent to the lake is the most preferred area in Kisumu. Other popular areas are Hills View and Riat Hills. Read more on flourishing property investment opportunities in Kisumu.

Each of the above cities has a sound infrastructure and a successful property development history. In my view an investment in property in any of these cities is bound to yield attractive profits.

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