As the global economy witnesses tectonic shifts, young investors are ditching stock markets, turning towards alternative investments, or “alts” as they are commonly referred to.
While majority have gravitated towards crypto trading, some of them have stormed into the real estate market, building on traditional industry norms to innovate for today’s customers for more repurposed gains.
Recent findings from a Lansons survey highlights this trend, showing that while many of young people invest in crypto assets, 30 per cent of Gen Z and 25 per cent of millennials have dipped their toes in the alternative investment space, majority finding home in real estate.
Millennials and Gen Z accounted for 43 per cent of all home purchases in the U.S. in 2023.
This trend is taking shape in Kenya, with Hellen Wangui, an investment manager at Amaziah DMW saying that 60 per cent of those buying the the firm’s properties in Muthiga are aged between 21 to 40 years.
“Young people are diversifying their investments in a manner that is shocking analysts. They have for instance rejuvenated the real estate industry, sparking its marked growth,” Wangui said.
“The generation before us invested in land as an asset but today’s generation goes further by asking: is that asset generating an income?”
“Most of our first time investors are moving from stock market, others converting cryptos. We help them grow value and can monitor activities real time and reap every month. That is how we have been able to navigate this market. People want an investment that generates passive income,” she added.
Property manager at the firm Sylvia Chepkurui says their youngest client is 21 years and has not even stepped foot at the property.
“We build, find customers and manage for our clients. The modern facilities are attracting young people due to features that resonate with today’s lifestyle,” she said.
For Amaziah DMW, we realised most developers in Muthiga area have specialised in two or three bedrooms. So we opted for more studio and one bedrooms and less two bedrooms.
So far, only 40 units of studio apartments which goes for Sh3.6 million and fetch close to Sh18,000 in rent every month are remaining
“The two bedrooms which go for sh5.5 million and can fetch sh35,000 rent monthly were are 32. They are selling at fastest rate due to proximity to Nairobi and gives fresh rural feeling with a modern touch,” Chepkurui said.
A complete social centre with supermarket, health, communication and lifestyle amenities is in the offing to complete market demand desires.
He foresees much more demand in the near future as the stocks, crypo and other markets crumble on rising uncertainties in the global market.
“While other markets anticipate shakeup, housing demand in Kenya is going beyond 500,000 units against a supply of just up to 50,000 units.”
The real estate market market in Kenya is expected to reach a value of $733.4 billion (Sh94.5 trillion) by 2024,
The residential segment dominates the market, with a projected market volume of $$657.6 billion (Sh84.8 trillion in the same year.
It is anticipated that the market will experience an annual growth rate of 5.18 per cent from 2024 to 2029 (CAGR 2024-2029), resulting in a market volume of $944.1 billion (Sh122 trillion) by 2029.