In its May report, the company says its outlook will be driven by positive demographic trends, rapid population growth rates, sustained infrastructure development and government’s big four housing agenda/FILE
NAIROBI, Kenya, Jun 4 – Cytonn Investments has retained a positive outlook for the real estate sector in the country.
In its May report, the company says its outlook will be driven by positive demographic trends, rapid population growth rates, sustained infrastructure development and government’s big four housing agenda.
The outlook is at the back of increased capital injection into the sector, where investors are lured by high returns on their investment, high demand for houses and government incentives that include tax reductions.
For instance, the sector recorded total returns on investments of on average 24.3 percent per annum over the last 5 years.
There are also government incentives such as a 15 percent corporate tax relief to developers who construct more than 100 low cost units years.
The Housing Price Index revealed that house prices increased by 2.1 percent in the first quarter of this year, compared to 0.7percent increase in the fourth quarter of 2017. According to the Kenya Banker’s Association index, the increase in price appreciation is attributed to improved macroeconomic environment.
It is also on account of the conclusion of market transactions put on hold during the prolonged electioneering period as investors adopted a wait and see approach.
Data by the National Housing Corporation shows that the housing deficit currently stands at 2 million units, growing by about 200,000 units per annum.
