Low private sector credit growth and prolonged elections hit country’s real estate market, Fusion Capital report finds

Low private sector credit growth and prolonged elections hit country’s real estate market, Fusion Capital report finds

Kenya’s property market has been under pressure due to prolonged elections and a decline in the pace of credit growth in the private sector, the latest edition of the Fusion African Monitor (FAM) has revealed. The report, which is a publication from Fusion Capital – a private equity firm focused on real estate investment, found that private sector credit expanded by only 2.1% in May 2017.

The other major issues were absence of foreign investors to supply the market with additional cash, and the slow-down in property transactions,creating liquidity and cash flow problems for property owners, stated the FAM report.

It found that the value of buildings approved for construction by the government in the first seven months of 2017 declined sharply 18.4% YoY to Ksh149.5 billion. As a result, many industry players are struggling to liquidate their positions, sell or even rent out.

Nonetheless, RE/MAX, the United State’s leading real estate franchise, has setup base in Kenya and is expected to revolutionize property transactions. The company uses an agent-centric business model with three tiers,which is banked upon technology and networks.

Previous Fusion Capital report ranks 2017 as one of the worst years for Kenya's credit sector
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