WHY REAL ESTATE VALUE APPRECIATES ANNUALLY IN KENYA.

Residential space in Kenya

In Kenya, most investors are now investing in real estate due to the positive cash flow attach to every property. In return, they gain financial freedom and secure their goals as well. Annually, Real estate appreciates in value not only in Kenya but also worldwide. Here are the reasons why there is a significant increase in value of real estate property specifically in Kenya;

1. Rapid growth in population.

With rapid growth in population especially in urban areas, most Kenyans have to provide shelter for their families. This definitely results to high demand for more real estate residential projects (housing projects). In other words, this means that increase in demand of more homes directly translates into faster population appreciation in Real Estate prices.

2. General behavior of fiscal inflation.

Yearly, property is evidently expensive to develop and also maintain. This becomes a concern due to steady increase in price of construction materials or input such as cement, steel, skilled labor etc and cost of land. Thus, general behavior of fiscal inflation makes property to be more expensive hence the significance rice of the nominal price of property. 

3. Supply and demand.

Supply and demand are economic models of price determination in a market. Just like any other kind of investment, in Real estate, the correlation between supply and demand is indirect. If demand is high and supply remains constant, it results to higher equilibrium price and higher quantity. The vice versa is also true. When the demand exceeds supply, residential property will automatically rise in terms of the prices. Over the years as experienced in Kenya, 2019 statistics shows that increase in demand for new homes for emerging families has led to real estate property value to increase.

4. Interest rates charged by banks for mortgage loans.

In real estate investment, interest rates have intense effect on the value of income-generation. Mortgage interest rates greatly influences property’s value. It is for this reason that interest rates affect three things namely; capital flow, demand and supply for capital and finally required investors. Consequently, interest rates affect the cost of financial and mortgage rates which in return affects property-level costs hence appreciation of property’s value.

In layman language, this implies that when the cost of mortgage loan interest rate decreases, the demand for residential space purchase hikes resulting to value increment of property.

5. Location where the property is situated.

The more accessible a Real Estate property investment location is, the more valuable the property becomes. The value of a particular property here in Kenya increases if the property is situated in a location where: 

• It is nearer to the educational centers and hospitals.
• It is easily accessible to the transport systems like roads. 
• It is closer to the shopping center. 
• Easily accessible to other fundamental public resources and services.

In summation, we can say that the above factors are indeed have greatly contributed to the steady increase of value in real estate property here in Kenya. Looking for property in Uasin Gishu County? Baoriat Agencies, have the greatest deals for you. Call us on 0721-554-937 or visit us in Eldoret town, Juma Hajee Building room 16.

Find Property in Uasin Gishu County

Baoriat Agencies

Call: +254 721-554-937

Related articles;

1. Effects of Covid 19 on Property
2. How to succeed as a first time Real Estate Investor
3. Architectural Home wall decor ideas in Kenya
4. Things to consider before buying a home in Kenya
5. Factors to consider when renting office space
6. 6 Innovative ways of cutting building cost