Why many Kenyans are today losing confidence in Kenya real estate

Kenyareal estate is a sector that had been doing well ever since, until just recently when everything started going haywire. It is very unfortunate that today, so many of the Kenyans are losing the confidence they once had in this sector. It is not necessarily for any ‘poor’ reason but for the ‘expensive’ services they’re now offering.

It is evident that the lands’ prices are extremely expensive, so expensive such that even the rich cry. Their prices have today been pushed very high, far much beyond an individual buyer’s budget.

For example, according to a recent research, a plot of land in Nairobi which used to go at Ksh 30Million in 2007 is today going at Ksh 170Million. This has increased more than 50 times. This is indeed surprising, as with the existing pricing by Kenya real estate, individuals cannot be in a position to purchase the prime pieces of land. The only people who are probably able to purchase such pieces of land are those with money, who however cannot put up any other thing except residential. This has made the sector weaken, as the middle class people who are supposed to purchase such land cannot afford it any longer.

What is making Kenyans lose confidence in Kenya real estate?

As a result of this increase in the pricing, Kenyans are today losing confidence in Kenya real estate. This is due to some leading factors which are as listed below.

The land is costly

Of the two types of properties namely residential and commercial, the most expensive one is the commercial property. Commercial properties are normally situated at the Central Business District, (CBD) where business opportunities are viable. These particular properties normally include the business premises, land or even rental houses, which are in the urban centers. Their expensive prices are however to the disadvantage of both the investors as well as the tenants who may want to put up their business in the CBD.

Cost of land is determined by its proximity to social amenities

Another factor that is making the cost of land be expensive, which results to Kenyans losing confidence in Kenya real estate is the fact that the cost of most of the properties/land is determined by their proximity to the social amenities. The social amenities include health care facilities, schools, financial institutions and infrastructure among others. For instance, the proximity of a property to an infrastructure makes it easily accessible, hence makes businesses operate in a very easy and smooth way. It is just that the more it is near to any social amenity, the more its cost will be.

Having looked at the above factors, it genuinely tells why the cost of properties is on the increase. So inasmuch as Kenyans are withdrawing from investing in this sector, the cost of land or properties will never lower.