Real estate firms tap diaspora market as housing deals surge

Deputy President Rigathi Gachagua making his address during the Diaspora Investment Conference 2023, which he closed after three days of deliberations at the Kenyatta International Convention Centre, Nairobi, on December 15, 2023. [DPCS] Kenyan real estate agents are increasingly turning to the huge diaspora population as a key market for land and property deals. With over three million Kenyans living abroad, real estate firms see a significant opportunity to attract investment from this lucrative demographic. Many Kenyans living overseas maintain strong ties to their homeland as they look for ways to build wealth back home. According to a report by the Central Bank of Kenya (CBK), remittance inflows in June 2024 totalled $371.6 million (Sh47.8 billion) compared to $345.9 million (Sh44.6 billion) in the same period last year, an increase of 7.4 per cent. "The cumulative inflows for the 12 months to June remained steady at $4,535 million (Sh584 billion) compared to $4,017 million (Sh518 billion) in a similar period in 2023, an increase of 12.9 per cent," noted the report. "The remittance inflows continue to support the current account and the foreign exchange market. The US remains the largest source of remittances to Kenya, accounting for 54 per cent in June 2024." A report by Statista shows that the real estate market in Kenya is forecasted to grow to about Sh89.7 trillion ($697.80 billion) in 2024. Looking ahead, the market is projected to see steady growth, with an annual growth rate of 3.84 per cent from 2024 to 2028, reaching a market size of Sh104.4 trillion ($811.40 billion) by 2028. According to the director of Famyard Real Estate agency George Wamariu, the diaspora market is a major focus for real estate. "Kenyans who have the means to invest in land or a home, but may not be able to physically come and look at properties. We are making it easier for them to purchase remotely," he said. "Because of issues with untrustworthy agents and family members back home, more and more Kenyans living in the diaspora are looking to work with reputable real estate firms that have strong portfolios. This allows the diaspora investors to make property purchases in Kenya without having to travel there themselves," he said. Purchasing power He noted that realtors are increasingly leveraging technology to reach potential homebuyers in the diaspora market as most of the Kenyans living in these countries are professionals; they have strong purchasing power and are looking for long-term investments. "As real estate agents, we are using modern technology to make it easier for people living abroad to buy property back home. We are creating virtual tours of local listings and advertising them on social media targeting online advertisers," he said. "This allows them to connect with potential buyers who may be located far away, making it simpler for those diaspora clients to browse available properties, schedule viewings, and ultimately invest in the local real estate market. They can afford plots going for Sh400,000 and above." Wamariu said they are attending events for Kenyan communities abroad and networking with them to promote investment opportunities back in the home country, a strategy that appears to be paying off. "When a person in the diaspora buys land in Kenya, I deliver the title to them. I attend real estate expos in the diaspora where I get to connect with investors. We offer a range of payment plans tailored to our client's financial capabilities," he said. Diaspora investment currently accounts for an estimated 20 per cent of real estate transactions in Kenya, up from just 10 per cent five years ago. A recent report by Cytonn on Real Estate Investment Trusts (REITs) says the real estate sector has been a significant contributor to the country's GDP, growing at a compound annual growth rate (CAGR) of 5.5 per cent for the past five years. In the third quarter of 2023, the sector expanded by 5.4 per cent reaching Sh785.9 billion compared to Sh743.4 billion recorded in the same period in 2022. "Owning a piece of Kenya is a point of pride for many in the diaspora, it's a way to stay connected to my roots and build for the future, even if I'm not there full-time," said Norman Magenda, who purchased a plot of land in Chaka Nyeri county while living in Kuala Lumpur Malaysia.

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