“Most of the middle income earners are looking at home buying, with the trend having grown significantly over the years,” said Moses Waireri, head of research at Sterling Capital Limited in Nairobi.
“Looking at the Komarack phase five project that Housing Finance Kenya has, it is already 90 per cent sold out. Kenyans are the bigger players in the commercial property market though the landscape looks to change since foreigners are attracted to the property market in Africa.”
Real estate in Kenya will however grow differently across the country not only in terms of purchases, but also depending on investment into the space.
The country is however incorporating eco-friendly building materials and architecture, though at a much slower pace than in other countries.
According to HomesKenya magazine, while returns on rentals are a mere eight per cent, and developments at 30 per cent, the country's real estate market is still a worthwhile investment space.
A 2012 report by published by Citi Private Bank and Knight Frank’s Prime International Residential Index tracking, also stated that out of the 71 best prime residential property locations surveyed, Nairobi recorded the highest growth.
High-end residential properties had grown 25 per cent, and Kenyan coastal town of Mombasa came second, with a 20 per cent increase.
While analysts expect that Kenya's growing middle class will become the driver of the country's growth in its property market, Waireri explains that this shouldn't be looked at as the sole factor.
“The assumption that the emerging middle class can finance their mortgages might not be entirely true,” he said.
“Mortgage lenders are financing the commercial property which in this case are schools, godowns and warehouses just to mention but a few.”
Kenya's robust property market has attracted a number of international developers, who plan on incorporating international architectural and building styles into the relatively unsaturated market.
Le’ Mac, a Dubai-styled project headed by local firm Mark Properties Kenya, plans to build a 22 storey tower on a 1.8 acre piece of land in Westlands, an upscale suburb and office hub in Nairobi.
Le’ Mac will include office, retail and residential space, and is expected to be completed by the end of 2015.
The Garden City project is another major project in the city, which will develop roughly 50,000 square metres into retail space, 421 residential units for sale and 3.4 acres of serviced land.
“The Garden City project that intends to build up to 500 homes already has received a lot of interest so, all this shows the trend in home buying in Kenya,” said Waireri.
Kenya has traditionally kept retail, office and residential property spaces separate, but projects such as Le’ Mac and the Garden City are mixed developments, which are expected to become a growing trend in future.
The performance of the shilling is also a key factor in the future of Kenya's property market. While it has been relatively steady against the dollar in the past few months, a weak shilling could lead to high interest rates, a significant deterrent to investing in or buying any property.
“In 2011 the weak shilling led to high interest rates that hurt the property market. A strong shilling makes it easy for imports therefore the property market can boom. So there has to be a balance in the currency for the property market to boom,” Waireri explained.