Type to search


No Housing Bubble in Kenya, Study Reveals

Peter Musila 2 years ago

Previously, people have been holding debates on matters real estate, as it is speculated that the sector is in a bubble.

Given that there has been a sudden upsurge in property prices, an unprecedented demand for property, and a rise in vacant houses and office spaces, then the debate might stand.

The study by Strathmore Business School, however, found no basis concrete enough to support the argument though. Instead, the study revealed that the property boom in Kenya is in line with the country’s economic growth.

The growing middle-class population sustained economic growth at an average rate of 5.2 percent for the past five years, and increased infrastructural development are some of the critical factors that have played a vital role in the expansion of the real estate sector as per the study.

However, mortgage uptake in the country has shown a downward curve despite the rapid growth of the sector. As of 2015, Kenya was estimated to have only 24,458 mortgage loans in a country with more than 40 million residents.

So, what could have led to the slow uptake? Slow growth in the mortgage market to unaffordable houses, low-income levels, high costs associated with mortgages, and lack of understanding about mortgages are some of the critical issues attributed to it.

From the study, the researchers said that the property bubble could develop over a period and thus urging participants to be cautious.  They also said that it is necessary for the lawmakers to come up with policies preventing real estate bubble such as the Capital Gains Tax which tames property prices.

Kenya2U has Great Property Deals Just for You!
• Intercity Gardens in Kitengela@ Ksh1.895M
• Tinga Springs in Kajiado @ Ksh99,000
• Ruaka Ridge homes in Ruaka @ Ksh7.1M
• Grey Oak property in Nanyuki @ Ksh350,000
• Grey Oak property in Athi River @ Ksh450,000
• Blue Bells Apartment along Beijing Road @Ksh7.4M
• inFinity Properties in Kantafu @Ksh 625,000
Call 0742343908 to Book yours Now!

Next Up