I would give a thousand furlongs of sea for an acre of barren ground
– William Shakespeare
There are many variations of passages of Lorem Ipsum available, but the majority have suffered alteration in some form, by injected humour, or randomised words which don’t look even slightly believable.
It is thousands of years since the greatest writer in the English language said that. These words have rung true centuries later, and even more accurate within the real estate sector. Real estate has seen a boom over the decade, and more so in the frontier economies where Kenya’s returns rank higher than its peers. The COVID-19 pandemic crippled almost every other sector, but undoubtedly, its impact was less felt within real estate. The dust seems to have settled as fast as it struck, and we are witnessing record returns just like within the period before the pandemic, if not better. Demand for real estate in Kenya is witnessing a new growth, with spikes recorded within Kenya’s capital than any other city in the region. One factor that continues to exacerbate this growth is the rise of the millennials, whose demand for riskier, higher return investments surpasses that of older peers.
The rise of the middle-class population.
The rise of the middle-class and high income earners has created a new class of homeowners. The Kenyan middle class population is estimated at 44.9% of the population and is expected to rise as population dynamics change- more children being born than ever before as well as improving healthcare systems. Clearly, the future looks bright and clear for developers within Nairobi. Interestingly, there are more investors streaming into the country looking for bargains than ever before. These factors have put pressure on demand thus leading to the multiple investments in different income brackets within the country. The bigger picture hypothesis is that the middle-class has shifted from the idea of standard-of-life to quality of life. This class of consumers prefer to spend their money on investing and living in modern housing within good neighbourhoods with proximity to social amenities.
The shift from standard to quality
The future of real estate will see an increased effort by developers in providing amenities that stand for uniqueness and class. The cliché amenities that once dictated urban living just won’t cut it in the future. Home buyers and investors are looking for more refined and singular tastes in amenities. They are looking for more than just survival and focusing more on comfort. This has seen home developments emerge fitted with swimming pools, gymnasium, entertainment areas among other comfort amenities on the rise in the recent years.
Demand and supply dynamics
In the famous words of Steve Bolton, “The only bad time to buy property is later.” This statement resonates well with developers and investors alike. The fundamental economics principle dictates that if there is a higher demand than supply of a product, the prices tend to rise. The real estate industry has seen an increase in demand. This is mainly due to the increase in demand from local investors as well as expatriates in the country and especially in Nairobi. Nairobi was listed among the top 5 cities in Africa as an investment hub according to Hot Spots 2025.
Embracing Green Technology and LEED
The world came together last year at Glasgow to brainstorm on solutions to further secure the planet by focusing on climate change. The construction industry, is estimated to emit 40% of the world’s carbon emissions making it the most important stakeholder in the control and prevention of climate change. This goes to show just how much green building and embracing LEED would significantly increase the chance of the planet’s survival. We expect in future to see rise to smart and green buildings under the LEED principles. The city skyline has already started seeing energy efficient buildings which are paving way for developers and construction practitioners to embrace its roles in reducing the carbon footprint. It is still worth noting that with technology comes capital investment, and therefore, embracing LEED will also lead to increases in property prices at the onset. We cannot rule out the ongoing research by industry stakeholders as technology is more and more coming at lower costs than was previously the case.
In conclusion, the real estate industry has a lot of potential for growth. Investors who are already conversant with these ideals are doing the best they can to secure a future which guarantees that their money will work for them. Homeowners are also securing a future for the next generation because why leave when you’ve not lived?