By Liban Mohamed
Real estate is both land and the permanent improvements that are attached to it, such as buildings, infrastructure, and recreational facilities. While the term encompasses many elements, it is mostly used in reference to land and housing.
The Kenya Vision 2030 is a strategy that aims at transforming the country’s economy into that of a middle-income status with a high quality of life for all its citizens. Its attainment hinges on the provision of adequate and affordable housing, among other parameters. With the rapid population and urbanization growth, the gap between demand and supply is expanding, leading to an increased housing deficit, according to statistics from the Kenya National Bureau of Statistics (KNBS).
The real estate sector, through the development and construction of land, sales, and property management, plays a major role in helping bridge this deficit toward the achievement of national housing goals.
Currently, Kenya faces an annual housing deficit estimated to be between 200,000 and 300,000 units. Most available housing is targeted at high-income groups, leaving millions of low- and middle-income earners unable to access decent and affordable homes.
The Vision 2030, together with the Bottom-Up Economic Transformation Agenda of 2023, are committed to closing this gap through the stated target of producing 200,000 to 250,000 affordable housing units annually. Much of these projects focus on informal settlements and the needs of low-income households, aiming to promote dignity, safety, and economic mobility.
The real estate sector, according to the KNBS Real Estate Survey Report 2024, remains one of the strongest drivers of economic growth in Kenya and thus helps shape national housing policies. The market for this has been both residential and commercial, and between 2019 and 2023, the output from real estate went up by 33.7%.
Investment and financing have taken a central role, with local and international investors pumping funds into large-scale housing projects. Government initiatives like the Affordable Housing Levy and setting up mortgage financing institutions also help make housing more accessible.
Public-private partnerships have emerged as a critical approach to upscale housing development. The real estate firms bring in investment, technical expertise, and project management capability, while the government provides infrastructure and regulatory support.
Furthermore, Vision 2030 places significant emphasis on modern urban planning and the development of smart city concepts, which specifically encourage developers to integrate green technologies, efficient layouts, and community amenities for better living in urban environs.
The challenges, however, persist despite these developments. Financial constraints restrict access to affordable housing finance due to high interest and long-term mortgage requirements for low-income earners. Infrastructure deficits in developing areas, such as inadequate water supply, poor road infrastructure, and health services, inhibit investment.
High land costs in urban and semi-urban areas, combined with land registry issues and disputes, are also barriers. Construction costs are still high due to inflation, foreign exchange movements, and increases in the prices of imported materials. Such challenges prompt the demand for innovative, cost-effective building technologies and a greater reliance on locally produced materials.
Real estate sector has great prospects for future development in the following aspects: modern construction technologies that will reduce the time taken to construct a building, thus cutting costs to make housing more affordable; community-based approaches to development that ensure housing projects are socially accepted and meet the needs of its intended residents; and innovative financing models like rent-to-own schemes, tenant purchase plans, and cooperative housing that develop home ownership.
It will continue to be one of the key drivers of the realization of Kenya’s Vision 2030 goal of accessible, sustainable, and adequate housing for all, through concerted efforts of government, investors, and the private sector.
The writer is the PR and Communications Assistant at Superior Homes Kenya