How Kenyan millennials can own homes despite economic meltdown

April 19, 2021

By Chris Coulson - CEO Mi Vida and MD Garden City
Email: ccoulson@gardencity-nairobi.com

When asked about solid investments one should make to secure their future, Oprah Winfrey, a celebrated TV show host and media mogul is once quoted as saying, “I will forever believe that buying a home is a great investment. Why? Because you cannot live in a stock certificate. You cannot live in a mutual fund.”

How right she was. It is no wonder affordable housing is prominently featured among the government’s Big 4 Agenda since the government understands that to secure a people’s future can seldom be achieved without a proper roof over their heads.

One of the most peddled falsehoods in recent times is the fact that millennials do not see the value in investing in home ownership. The converse is true. Current millennials are very adept at identifying lucrative investment avenues and the only bottleneck they face when it comes to home ownership is the lack of the right knowledge especially on financing.

A report published in India in 2019 titled ‘Age of Indian Homebuyers – Across Decades and Cities’ revealed that 20 percent of people serious about home buying fall in the age bracket of 25-35 years and 37 percent fall in the age bracket of 35-45 years. Furthermore, at least 7 percent are under 25 years of age.

The report revealed that the increasing number of young home buyers across leading cities in India shows that the youth is not just technologically advanced but financially sound as well. Most importantly, availability of finance options are aiding them in the home buying process.

It is said that when a tree falls in the forest, it still makes a sound even if no one was around to hear it. The fact that access to information on home ownership financing is scanty to the young Kenyan population does not take away from the fact that it is still a lucrative investment vehicle.

Like their Indian counterparts, Kenyan millennials form the best demographic in our population to work with if we are to ensure we have adequate housing. What we can learn from the ardent uptake of home ownership among India’s millennials is the fact that, once offered with viable financing options, young people will not shy away from home ownership.

They say age is nothing but a number and that is why young people should not shy away from investing in homes. Investing early in a home comes with several benefits including but not limited to putting your money toward mortgage payments instead of rent, investing in property that is always increasing value and building a credible credit history at an early age.

Millennials in Kenya, just like those in India, have several financing options they can pick from. One of the oldest ways to raise capital for investment is simply saving money. Saving has long been an encouraged strategy, one that can be easily achieved through habitual practice cultivated over time.

In this regard, Kenyan youth have a healthy saving habit and only need to be nudged to invest their savings wisely. According to a Geopoll study released in January titled ‘The State of Financial Services in Sub-Saharan Africa HOW YOUTH IN SIX AFRICAN NATIONS SPEND, SAVE, AND INVEST’ it is revealed that 35 percent of Kenyan youth use self-help groups for savings, while mobile money accounted for 54 percent and bank accounts 48 percent of youth savings. Saving through a reputable Sacco or investment fund is also a sure way to save and earn interest on your savings. With a Sacco, you can get a loan and pay it back with low manageable interest rates.

Another pick millennials can make in the wide array of options available is the ‘off-the-plan’ method. Buying a house or apartment off-plan means signing a contract to buy a property that is yet to be built. You can view the developer’s plans, designs, and renders for the property. It is a financially feasible plan because you are only required to pay a deposit, usually 10-20 percent with the option to clear the balance in installments through the construction period.

After all is said and done, it is important for one to do their due diligence and invest with a reputable real estate provider. Cases of fraud involving real estate acquisition might have contributed to the reluctance in some youth to invest in homes. However, a reputable and professional real estate provider will not only ensure you do not lose money but also that get you the best possible price for your home, or to see to it that you get the best possible deal on the property you want to buy.

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How Kenyan millennials can own homes despite economic meltdown

April 19, 2021

By Chris Coulson - CEO Mi Vida and MD Garden City
Email: ccoulson@gardencity-nairobi.com

When asked about solid investments one should make to secure their future, Oprah Winfrey, a celebrated TV show host and media mogul is once quoted as saying, “I will forever believe that buying a home is a great investment. Why? Because you cannot live in a stock certificate. You cannot live in a mutual fund.”

How right she was. It is no wonder affordable housing is prominently featured among the government’s Big 4 Agenda since the government understands that to secure a people’s future can seldom be achieved without a proper roof over their heads.

One of the most peddled falsehoods in recent times is the fact that millennials do not see the value in investing in home ownership. The converse is true. Current millennials are very adept at identifying lucrative investment avenues and the only bottleneck they face when it comes to home ownership is the lack of the right knowledge especially on financing.

A report published in India in 2019 titled ‘Age of Indian Homebuyers – Across Decades and Cities’ revealed that 20 percent of people serious about home buying fall in the age bracket of 25-35 years and 37 percent fall in the age bracket of 35-45 years. Furthermore, at least 7 percent are under 25 years of age.

The report revealed that the increasing number of young home buyers across leading cities in India shows that the youth is not just technologically advanced but financially sound as well. Most importantly, availability of finance options are aiding them in the home buying process.

It is said that when a tree falls in the forest, it still makes a sound even if no one was around to hear it. The fact that access to information on home ownership financing is scanty to the young Kenyan population does not take away from the fact that it is still a lucrative investment vehicle.

Like their Indian counterparts, Kenyan millennials form the best demographic in our population to work with if we are to ensure we have adequate housing. What we can learn from the ardent uptake of home ownership among India’s millennials is the fact that, once offered with viable financing options, young people will not shy away from home ownership.

They say age is nothing but a number and that is why young people should not shy away from investing in homes. Investing early in a home comes with several benefits including but not limited to putting your money toward mortgage payments instead of rent, investing in property that is always increasing value and building a credible credit history at an early age.

Millennials in Kenya, just like those in India, have several financing options they can pick from. One of the oldest ways to raise capital for investment is simply saving money. Saving has long been an encouraged strategy, one that can be easily achieved through habitual practice cultivated over time.

In this regard, Kenyan youth have a healthy saving habit and only need to be nudged to invest their savings wisely. According to a Geopoll study released in January titled ‘The State of Financial Services in Sub-Saharan Africa HOW YOUTH IN SIX AFRICAN NATIONS SPEND, SAVE, AND INVEST’ it is revealed that 35 percent of Kenyan youth use self-help groups for savings, while mobile money accounted for 54 percent and bank accounts 48 percent of youth savings. Saving through a reputable Sacco or investment fund is also a sure way to save and earn interest on your savings. With a Sacco, you can get a loan and pay it back with low manageable interest rates.

Another pick millennials can make in the wide array of options available is the ‘off-the-plan’ method. Buying a house or apartment off-plan means signing a contract to buy a property that is yet to be built. You can view the developer’s plans, designs, and renders for the property. It is a financially feasible plan because you are only required to pay a deposit, usually 10-20 percent with the option to clear the balance in installments through the construction period.

After all is said and done, it is important for one to do their due diligence and invest with a reputable real estate provider. Cases of fraud involving real estate acquisition might have contributed to the reluctance in some youth to invest in homes. However, a reputable and professional real estate provider will not only ensure you do not lose money but also that get you the best possible price for your home, or to see to it that you get the best possible deal on the property you want to buy.

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