According to a recent Business Daily article, the intensification of conflicts in the Middle East has triggered a notable shift in global investment patterns, with real estate investors increasingly turning their attention towards Africa. The ramifications of geopolitical instability resonate far beyond the confines of the Middle East, shaping investment dynamics and driving a surge in demand for real estate assets even in Kenya. The recent conflicts in the Middle East have heightened property costs in Dubai and other once-lucrative destinations for real estate investors. Consequently, real estate investors are turning their attention towards Africa due to its long-term potential for growth. Kenya presents a strong option for these investors.
Statistics from the Kenya National Bureau of Information (KNBS) 2023 Economic Survey indicate that Kenya’s Real Estate sector contributed 11,490.5 Billion to the country’s Gross Domestic Product in 2022, which was an increase from 2021 when the sector contributed 10,765.9 Billion. These statistics demonstrate a noticeable increase in real estate transactions, which suggests increased investor confidence and interest in Kenya's real estate market.
The Central Bank of Kenya conducted a CEOs Survey in January 2024 where about 40 CEOs in the real estate industry were interviewed. The survey provided additional insights into market attitudes and investment patterns, with the interviewed CEOs expecting growth in the country’s real estate sector on the back of the government’s focus on affordable housing. In addition, Knight Frank’s Wealth Report Kenyan Edition 2024 indicates that High-net-worth individuals (HNWI) plan to purchase new homes in 2024. Kenya is set to benefit from these home purchases as the interviewed HNWIs ranked Kenya as the top destination for new home purchases and second home purchases. Kenya was also ranked as the second most preferred destination for third home purchases.
In addition to having a vibrant real estate market, the country also benefits from a robust legal framework governing property rights, land tenure, and contract enforcement. The relevant statutes include the Constitution, the Land Act 2012, the Land Registrations Act and the Sectional Properties Act 2020. These statutes provide a solid foundation for investment, mitigating risks associated with investing in emerging markets.
In addition, new regulatory changes introduced to improve transparency and simplify property registration procedures have helped strengthen investor trust, enhancing the attractiveness of Kenya’s real estate market. These deliberate actions demonstrate that the government is devoted to opening up opportunities for making money through the country’s real estate sector.
In conclusion, real estate demand in Africa has significantly increased due to the conflict in the Middle East, as investors seek stable and resilient markets. Kenya's strategic advantages, coupled with its robust legal framework and favourable investment climate, could position it as a prime destination for real estate investment amidst global uncertainties.
Please note that this is not legal advice and is intended primarily for information purposes. If you require tailored advice or further information, please contact us at sarinke@mckayadvocates.com.
References
The Business Daily [ https://www.businessdailyafrica.com/bd/markets/real-estate/real-estate-investors-turn-to-africa-on-mideast-conflicts--4598464 ]
Central Bank of Kenya, Chief Executive Officers (CEOs) Survey January 2024
The Wealth Report Kenya Edition, 2024
Kenya National Bureau of Statistics Economic Survey, 2024
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