Impact of Gen Z protests ripples through real estate

A view of Nanyuki town, where real estate developers are focusing on long-term, sustainable projects amidst challenges in Nairobi's property market. [Standard, File] The recent wave of Gen Z-led protests across Kenya has sent ripples through the economy, with the real estate sector among the hardest hit. These youth-driven demonstrations, fueled by frustrations over unemployment, economic inequality, and social justice, have disrupted urban centres, halting construction projects, unsettling property markets, and shaking investor confidence. One of the most immediate consequences has been delays in construction activities. Builders report significant disruptions caused by road blockades and supply chain interruptions, with the effects reflected in the broader economy. According to the Kenya National Bureau of Statistics (KNBS), the construction sector contracted by two per cent in the third quarter of 2024, a stark contrast to the 4.0 per cent growth seen during the same period the previous year. Key indicators of this downturn include a 10 per cent drop in cement consumption, a 40.9 per cent decrease in imported bitumen, and a 4.2 per cent decline in galvanised sheet production. Meanwhile, credit to construction enterprises fell by 13.6 per cent, signalling tighter financial conditions for the sector. The economic impact extends beyond construction. Kenya's GDP growth slowed to four per cent in quarter three of 2024, down from six per cent in the same quarter of 2023. While the country experienced a robust 5.6 per cent growth in 2023, driven by favourable agricultural conditions, the World Bank has revised its 2024 growth projection to 4.7 per cent, citing challenges such as floods, anti-government protests, and fiscal instability. In Nairobi, the protests have hit urban rental markets hard. Landlords in the Central Business District (CBD) report a 20 per cent decline in tenant renewals, as safety concerns and frequent business disruptions drive professionals to relocate. In the Nairobi Metropolitan Area, the total value of approved building plans plummeted by 41.3 per cent year-over-year in October 2024, underscoring the widespread hesitancy among developers to initiate new projects amidst economic and logistical uncertainty. Faced with these challenges, the real estate sector is adapting. Developers are shifting their focus from rapid expansion to sustainability, operational efficiency, and risk mitigation. David Muriithi, director at Investorpride, describes the past year as a period of reckoning for the industry. "Developers are becoming more selective and cautious about new investments," he explains. "There's a growing recognition that adaptability is key to navigating unpredictable market conditions." A major part of this adaptability has been the embrace of digital tools. Social media, virtual tours, and online platforms are now essential for showcasing properties to global audiences, reducing reliance on physical showings, and maintaining business continuity during disruptions. Developers are also turning to contactless transactions, such as digital cash and agreement transfers, to streamline processes and ensure safety. In addition, structured site visits have become a common strategy. By scheduling fixed dates for viewings, developers can better manage customer flow and provide a seamless experience for potential buyers. Projects like Zari Gardens in Chaka are benefiting from this approach, leveraging their proximity to areas like Nanyuki to attract both local and international clients. Long-term thinking is also reshaping the sector. Developers are encouraging property owners to focus on improving and expanding their existing investments, a strategy that enhances value and stability during uncertain times. "By scheduling site visits in advance, developers can better manage customer flow and ensure prospective buyers can view properties without disruption or uncertainty, even during ongoing demonstrations. This approach helps maintain a steady level of interest and ensures that the buying process remains smooth, despite the external challenges posed by protests and other disruptions," said Muriithi.

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