Real estate bubbles have scared many investors aways from potential housing hotspots. The housing bubble of 2007 along with current bubbles like the one in Burma, create major uncertainty for investors. However there appears to be a rapidly growing market for luxury homes in Kenya that’s based on sound growth and economic fundamentals. CNN reports on this new hotbed for real estate investment:
…a study earlier this year by estate agents Knight Frank and Citi Private Wealth found that Nairobi was the best performing prime residential market in the world.
Values in the city grew up by 25% in 2011, leaving luxury hotspots such as London, Miami and Hong Kong behind.
Ben Woodhams, managing director of Knight Frank Kenya, says the findings of the survey surprised even the agency’s research department.
“We were higher than Miami and it was like ‘how dare you,’” he says. “So we had to justify our figures and say ‘yes, this really is what is happening here.’ But it is about growth, it is not about value.”
Although this growth comes from a base of relatively low prices, Woodhams says there’s a number of factors that has made investing in Kenya’s luxury housing market attractive.
“Regionally Kenya is a safe haven,” he says. “People are seeing relatively good returns in Kenya specifically, but [also] in Africa as a whole — particularly with the problems we are seeing in the rest of the world.”