In recent years, a significant trend has emerged among Kenyans living abroad who are opting to invest in the real estate market back home. This blog explores the various factors driving this trend, shedding light on the motivations, preferred investment sectors, and the impact of Kenyan diaspora investments on the local real estate industry.
Motivations for Investment:
The decision of Kenyans in the diaspora to invest in real estate is fueled by multiple factors. A primary driver is the potential for a lucrative return on investment. Additionally, many express a strong desire to own property in their home country and establish a place to retire in the future.
Investment Preferences:
According to a survey conducted by the Norwegian-based accelerator company Pangea Trust, approximately 36% of the Kenyan diaspora allocates funds for buying stocks and investing in private equity or venture capital-related securities. Notably, the real estate and construction sectors emerge as the frontrunners, with 29% of respondents acknowledging their investments in these areas.
Impact on the Real Estate Industry:
Kenya's real estate industry has experienced substantial growth due to the influx of investments from Kenyans in the diaspora. High demand for land is evident across key areas such as Nairobi and its metropolitan regions, including Malaa, Joska, Kamulu, Ruiru, Ngong, and Kangundo Road. This surge in demand has led to increased property values and economic development in these regions.
Key Factors Driving Demand:
Denver Group Limited's research underscores several factors contributing to the heightened demand for land in specific areas. A well-developed road transport network, facilitating easy movement of vehicles and public service vehicles, plays a pivotal role. Additionally, the presence of essential social amenities such as reliable electricity supply, hospitals, schools, and security administration posts enhances the attractiveness of these locations.
Investment Opportunities:
Real estate businesses in high-demand areas, like Denver Group, have responded to this trend by offering straightforward and affordable payment plans. Parcels of land, ranging from 100 by 50 to 1/4 acres, are among the most sought-after. With prices ranging from Ksh 580,000 to Ksh 2 million, these businesses often provide flexible payment structures, allowing buyers to pay 20% upfront and spread the remaining balance over six months.
A Cautionary Note:
Amidst the growth in real estate investments, it's crucial for potential buyers to exercise caution. To avoid falling victim to fraud and legal disputes, it is imperative to ensure that any property under consideration possesses a valid and verifiable title deed.
Conclusion:
The increasing trend of Kenyans in the diaspora investing in real estate reflects not only a financial opportunity but also a strong connection to their homeland. As this trend continues to shape the real estate landscape, it opens up new avenues for economic growth and development in key regions across Kenya.
