The expected rallying of the agricultural sector, growth in the tourism, real estate and manufacturing sectors has slowed down Kenya’s moderate economic growth that began in 2019, according to latest experts’ revised projections,

…we expected the real estate sector performance to be shaped by focus on affordable housing, increased mortgage uptake and adoption of sustainable developments and technology…

Cytonn Investment’s Senior Investment Analyst Caleb Mugendi says that the outlook for Kenya’s macroeconomic environment is positive, supported by expectations for strong economic growth at between 5.7 per cent and 5.9 per cent, a stable currency, inflation rates within the government’s target and stable interest rates in 2019.

Speaking in Nairobi recently, Mr Mugendi said the conducive operating environment that had supported investments in the equities market and private equity activity, where there is a positive outlook in both asset classes, owing to the attractive valuations, has been hit by coronavirus.

“We also expect monetary policy to remain accommodative and political stability (in the coming months). However, worries about Kenya’s debt sustainability and the revenue collection capacity by the Kenya Revenue Authority against its budgetary targets, have led to a build-up in short term risks thus, our view is that investors should be biased towards medium term fixed income instruments,” Mugendi explains.

“Our outlook for real estate is neutral as the slowdown in demand for property persists amid increasing supply. We expect a positive performance in sectors like mixed-use development, land and hospitality and a negative performance in the commercial sector and listed real estate,” Juster Kendi, a research analyst at Cytonn, says.

“In 2019, we expected the real estate sector performance to be shaped by focus on affordable housing, increased mortgage uptake and adoption of sustainable developments and technology. We note that the real estate sector is mainly constrained by high financing cost for both developers and off takers and we expect the market to pick up should the interest rate cap be lifted or should the government establish other financing methods such as tapping into capital markets and incentives for the mortgage market,” Kendi said.