The pre-election and post-election uncertainty in the country has been a slap in the face of many investors. Afraid of the potential risk, many have shied away from emptying their pockets into the markets. Real estate has taken its own share of the battering. However, many investors would contend that it’s out of such risky situations that fortunes are crafted out by the market savvy individuals. For instance, a DataFintech investment report details how two locations in Nairobi could be a perfect playground for such contrarian investors. The report examines the change in prices for 2-bedroom apartments in Imara Daima and Syokimau suburbs over the past one-year.
According to the report, median sale price for a 2-bedroom apartment in Imara Daima decreased by 6.7% between Q4-2016 and Q4-2017, from about Ksh. 7.5 million to Ksh. 7million while the same property in Syokimau went down by 2.1% to Ksh. 4.6 million.
About rent, the one year rental yield in Imara Daima is at 6.4%, against 6.1% in Syokimau. The median rent for a 2-bedroom apartment remained constant at Ksh. 40,000 in Imara Daima while in Syokmau the median rent declined by 4.2 % to Ksh. 23,000 fro Ksh. 24,000. Thus, demand for rent is higher in Imara Daima than Syokimau, with a steady rent price against a 4.2% drop respectively.
For investors interested in riding the market in the upturn, the numbers point to Imara Daima. The decline in price is a good opportunity to enter the market, the uncertainties notwithstanding. In any case, in real estate you buy and wait. You don’t wait to buy.
Regardless, the mantra in real estate is to buy and wait. Not wait to buy.