The Backbone Of Real Estate In Kenya

| Mwenda Thuranira

Kenya has, in the past few decades, seen an exponential growth in the real estate sector. Years from now, this time will be recalled as the period of construction and reconstruction in Kenya. If you are an investor and are still alive in this era, then it would be a far too expensive opportunity-cost to forego the Real Estate option. Here are some of the key factors that have considerably led to Real Estate Growth in Kenya:

Improved purchasing power

The Kenyan economy, as per Kenya National Bureau of Statistics indicators, shows a steady growth of the Kenyan economy at rate of about 5% per annum. This therefore interprets to an annual increase in the per capita income (income per person) leading to an increase in the Kenyans’ purchasing ability of items including real estate. This growth is expected to continue into the future, which makes Kenya a reliable option for investors, particularly when it comes to the real estate market.

Growing middle class

The increased purchasing power has contributed to the growth of the number of middle-income earners in the nation as a result of job creation backed by good education and entry of improved technology in different sectors of the economy. Educated youth are able to find lucrative jobs that provide a steady income allowing them to afford adequate housing via loans and mortgages. The power to purchase their homes or pay a higher rent has created a demand in the property market which is a source of revenue and delight to property developers. The youth therefore add to the number of local investors in Kenya.

Foreign investment

A myriad of multinational firms are tapping into the Kenyan market as a gate-way to capture the East African market in the long run. The Kenyan government and her people have created incentives to foreign investors through attractive legislative and social frameworks that can accommodate them both in the present and future. Projections done by the World Bank reveal that the Kenyan economy is likely to experience an economic growth of approximately 5.7% for the year 2013 – this has served as an eye opener to foreign investors.

Investment in infrastructure

Both the central government and private investors have seen the value of investing in both transport and communication networks. Such infrastructure developments include the Thika Superhighway; the Lamu Port South Sudan Ethiopia Transport (LAPSSET) corridor; and the Dongo Kundu, Southern and Northern bypass. They are envisioned to: improve efficiency in economic relations with other countries and among the local business community; and to open up new real estate markets in different geographic locations.

This is the ideal moment to jump on the bandwagon and reap the foreseen returns from real estate.

Mwenda Thuranira is the CEO of Myspace Properties

 

| 30 Aug 2013

Advertisements

GROWING YOUR MONEY – ABCs for stock market Investors

 

“If you’re learning to invest, but don’t take action, you’ve done nothing more than those who never bothered to learn in the first place.”  Robert T. Kiyosaki

 

|  John Macharia(Investment Planner)

Investing in the stock market is a rewarding experience for some and a disappointment for others. Many individuals aspire to own stocks. However, there’s a perception that the stock market is the province of high net-worth persons only.

This is not the case. The market offers equal opportunity to all investors; financial capacity notwithstanding. Some investors start on a wrong footing and end up losing hard-earned cash. They burn their fingers in the first attempt, learn no lessons, and then quit the market with losses and frustration.  This can be avoided. Good knowledge of the basics help you understand how stock trading works.

The first lesson is that those with knowledge about stock trading stand a better chance of success. The second is that even the most refined investors have made losses along the way. Investors should set realistic expectations in terms of returns. Any worthwhile investment will at some point reflect a big profit, big loss, small profit, small loss or breakeven.

What investors seek to do is mitigate big losses and make reasonable returns. One needs to have clear objectives, outlining the amount of money available for investment, time frame to meet these objectives and the risk vis-à-vis expected returns. Once the decision to invest has been made, stock selection follows. This is an obvious but difficult step in stock trading.

With a wide variety of stocks available, one must first consider which sector one wishes to invest in and then start to research on stocks in those selected sectors.  An analysis of each stock to know its actual worth and future prospects is a must, as well as technical analysis to ensure you don’t buy it expensively. As some analysts say, the stock market is 85% psychology and 15% in economics; for one to be a successful investor, good technical analysis is indispensable.

Proper planning, prudence and patience are critical recipes for success.  These guide the decision making process when buying or selling and eschew dealings initiated out of emotion. The plan should include an exit strategy to allow the investor to jump out of the market with profit. For beginners it’s desirable to start small, invest wisely and stay a distance, as you build confidence.

Another aspect that investors tend to overlook is choosing the right stockbroker. A good stockbroker should offer advice, guidance and support to take you through the trading process. A seasoned stockbroker with a good track record can become a powerful partner in pursuit of wealth creation. However it is  important to remember that any investment decisions  you make will ultimately be your own.

The path to investment path can be bumpy. However, if you clearly identify your investment goals, learn investment basics, choose quality stocks and closely monitor and manage your portfolio, you enhance your chances of success.