Kenya Property Index to be Introduced

Kenya is the second African nation to recognise the growing requirement from international property investors for a complete and honest property index on which they can base their investment decisions. 

South Africa already has a real estate index in place and this month the Kenya property index has been introduced.

The index will be collated and created by the Kenya Real Estate Index which is a group of Kenyan property experts from the fields of construction, finance, development and property ownership.  They expect the full index to take 2 years to compile but will initially concentrate efforts on Nairobi’s real estate sector as this is the country’s most in demand location from domestic and international investors.

As Kenya is quickly developing as one of the most exciting real estate market places in Africa, the need to have a clearly defined index detailing property price growth, land price developments, rental yields, occupancy levels and the general investment climate across the country is very real indeed.

According to Reginald Okumu, the chairman of the Institution of Surveyors of Kenya, in the past investors have had to rely on potentially biased or unreliable information or on their gut feel when it came to making investment decisions in Kenya.  There has never been a report compiled to detail property price growth or even the general basis on which land valuation is done in Kenya which makes it incredibly difficult for an investor to gauge whether their investment decisions taken are right or wrong.

As stated the Kenya Real Estate Index, which is responsible for the collation of data for the creation of the index, will take two years to produce their first reports and thereafter they will issue quarterly reviews of the state of the property market in Kenya.  Initially the group are concentrating on the most exciting and dynamic sectors of the market and these are the residential and commercial property markets in Nairobi and its immediate suburbs.

The reports from the index will be based on information taken and analysed from the Institution of Surveyors, the Association of Kenya Insurers, the Kenya Bankers’ Association, the Association of Retirement Benefits Schemes, the Kenya Union of Savings and Co-operative Schemes, the Kenyan government and from property developers, estate agents and home owners in Kenya.

It is hoped that the Kenya property index when introduced will offer investors greater clarity and give the property market greater transparency which in turn will result in an influx of direct investment into the emerging property market in Kenya.

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