Instead of buying a car, invest your first salary in property

With the 22nd Kenya Homes Expo coming up at the end of this month, many Kenyans will be looking to find solutions to their housing needs at the four-day event.

But instead of browsing the stands looking for and at everything, one industry player has some advice for the young and newly employed.

In an industry where almost all players are obsessed with following trends, such as buying land for speculative purposes, it has emerged that a lot more value can be obtained by simply buying complete housing units specifically targeting individuals in their first jobs.

“After getting their first salary, many new employees almost naturally opt to buy a car, which then becomes a liability, while for roughly the same amount of money, they can own their first home,” Muchiri Waititu, an architect with Adventis Inhouse Africa (AIA), said.

Kenya’s gross domestic product (GDP) increased to $55.2 billion (Sh5.7 trillion) in 2013 from $44.1 billion (Sh4.5 trillion) a 25.3 per cent jump. The real estate sector contributed 5.9 per cent of this value.

But how viable and practical is an investment in real estate for first-time buyers on limited budgets or in first jobs?

“Many housing projects tend to force buyers to adopt their lives around the project. In our case, our developments are basically tailored to fit the lives of the young or those newly married with small families. The issue has been in striking the balance between quality, affordability and practicality,” he said.

And, he believes, his company, in partnership with other development partners, has found this balance with its most recent project in Nairobi, the Race Course Gardens.

Modern lifestyles

Upon completion in January next year, the project, located a few minutes from the Junction Shopping Mall in Dagoretti Corner, will have 436 apartments, a commercial centre, swimming pool, play area and baby nursery.

“We understand that modern lifestyles have forced a certain form of unpredictability in the lives of many parents. So one of the things we have provided for is a fully functional, internally run nursery with professionals who will look after babies as their parents earn a living,” Muchiri said.

The project has also separated the car park and play area to offer parents peace of mind when a car pulls up, as well as ensure those without children do not worry about their vehicles being damaged by stray balls.

“All these are valid concerns that add to the living experience. Many grand housing projects try to reinvent the wheel and miss out on the basics.”

According to a recent report by Hass Consult, the limited availability of land and high demand for housing has contributed to an increase in the cost of homes for sale and rent. Residential property prices rose by 8.3 per cent year-on-year in 2014, with apartment prices increasing 13.2 per cent.

The single-largest contributor to the rise has been the increased demand for housing by middle-income Kenyans, with official estimates putting the need at 200,000 units annually.

“The need for affordable housing cannot be overemphasised, and that is what we aim to provide. This segment of the market has been neglected for a while, and it is the one we are targeting with our project,” Muchiri said.

Prices at Race Course Gardens begin at Sh3 million.

“The young and newly employed need to walk around and see the options available.”