Real estate remains one of the fastest-growing industries with its activities supporting sustained economic growth and the potential of higher returns. The sector contributed 8.6% to GDP in 2022. Some of the major avenues that real estate continues to impact the country’s economy include:
Job Creation: The real estate industry creates a significant number of jobs in various sub-sectors and occupations such as construction, architecture, engineering, surveying, and property management.
Expansion of other sectors: Real estate projects give rise to the growth of other sectors and businesses like the retail sector, healthcare facilities and education institutions.
Tax Revenue: The real estate industry contributes to the economy through tax revenue. The government collects taxes in the form of property taxes, sales taxes, and income taxes on real estate transactions.
Infrastructure Development: Real estate development creates a demand for infrastructure, such as roads, bridges, and public transportation, which contributes to economic growth.
Housing Market: A healthy housing market boosts the economy by providing a foundation for consumer spending, credit growth, and job creation. With the expected growing population, housing demand is rising steadily hence the need to bridge the gap through decent housing.
Investment Avenue: Kenya’s real estate industry is a fertile ground for better rates of returns despite cyclical headwinds including economic downturns and rising interest rates.
Kenya is a regional financial and investment hub and the main entry point for East Africa, increasing investor confidence. Therefore, the real estate sector remains an appealing investment opportunity.
Overall, the real estate sector plays a vital role in the country’s economy. The rise in property value and the construction of new properties positively impact the economy. An increase in real estate development translates to overall economic growth.