Kenya Real Estate and Construction Sector
Kenya Real Estate and Construction Sector has been performing beyond expectation for over a decade now, and it has continued to be a major driver of the country’s economy. There is an annual demand of more than a quarter million house units in the country and, since the government has been unable to meet this demand for housing, the private sector, the diaspora and individuals have all come aboard to fill this vacuum. The result has been an exponential growth of Kenya Real Estate and construction sector. The returns have been rewarding and thus drawn more and more people, organizations and firms to invest in the sector.
Contribution of Kenya Real Estate and Construction Sector
Kenya Real Estate and construction sector contribution to GDP came in at 15.9% in 2022, a 0.1% points
decline from 16.0% in 2021 attributed to the following factors:-
- The rising costs of construction materials hindering investments
- The completion of major development projects in the country such as the Nairobi Expressway, Eastern Bypass, and
- The government’s decision to cut back on infrastructure expenditure in FY 2022/23 by 21.4% to Kshs 174.0 billion, from the Kshs 221.3 billion previously allocated, which slowed down activities in the construction sector. Moreover, the Real Estate sector GDP growth came in at 4.5% in 2022, a 2.2% points decrease from 6.7% in 2021. This was attributed to increased cost of construction materials which hampered optimum investments, and reduced investor confidence as most investors, for the most part of the year, adopted a ‘wait-and-see’ approach in anticipation of the August 2022 general elections
Current Expectations in Kenya Real Estate and Construction Sector
- We expect the sector’s contribution to GDP to improve going forward, supported by improved
investor confidence following the peaceful conclusion of the general elections, and increased
activities across different themes. The construction sector’s performance is anticipated to improve
supported by focus on development projects, under the affordable housing initiative and
completion of ongoing infrastructure projects - However, inflationary pressures still persist as a result of supply chain bottlenecks worsened by
the Russia-Ukraine war, contributing to the increased costs of construction materials. We expect this will hamper optimum investments in Kenya Real Estate and construction sector -
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Home Construction in Kenya
