Why more Kenyans are ditching city rentals to invest in plots: path to affordable housing

Path to affordable housing: Are you trapped in the cycle of high rent, cramped living spaces and the relentless pressure of low income with dwindling savings? Well, you are not alone. Notably, according to the Kenya National Bureau of Statistics, 77.9% of households struggle with inadequate housing primarily due to low income. This is alarming considering the ever-increasing rental prices, high inflation and urban congestion within the city. But how do you escape this? Many Kenyans have opted to choose smarter living by relocating to satellite towns away from the city.

There has been a shift in the real estate landscape, especially with the rising cost of living and unpredictable rental prices dominating our headlines. More youths and young families are looking for a long-term yet sustainable solution to the high rental prices and now opt to buy 1/8th acre plots in satellite towns away from the city and commute to work. This trend rewrites the history of land ownership and creates a new path to affordable housing that may have been ignored for a long time.

Rise of Plot Investment in Satellite Towns

Towns like Ngong, Kamulu, Matuu and Kangundo are now hotspots for young investors looking for affordable solutions to the high cost of living in the city. With land prices starting from as low as Kshs. 250,000 in these satellite towns, aspiring homeowners have found a more affordable option, even for those with modest incomes.

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Username Investment Ltd., for example, has sold out over 10 projects in Ngong and most of these projects are already inhabited by the owners who work in the city. Many homeowners prefer to live away from the city and have no rent compared to living close to the city, yet have high rent arrears for months on end. What was once a representation of wealth is today a representation of hope, security and a future of saved rental income.

According to Username Investment Ltd, over 21,000 title deeds have been issued to clients who once thought land ownership was out of reach, yet today, they proudly hold their title deeds and build their homes at their own pace in towns away from the city which is more affordable compared to paying rent in overpriced apartments.

Internal data at Username Investment has shown that there has been a continued 10% increase in the sale of plots in satellite towns, particularly post-COVID-19. This trend suggests a significant shift in priorities for many Kenyans, who are increasingly choosing land ownership over high-end urban lifestyles.

Additional key findings show that:

• Since 2020, Ngong and Nakuru have experienced a notable 25% increase in land inquiries and purchases, highlighting their growing appeal to investors.
• Ngong continues to be a top choice for young and first-time investors, primarily due to its strategic proximity to Nairobi.
• Approximately 40% of new landowners are Kenyans aged 35 and below, indicating a positive trend of increasing financial empowerment and a focus on long-term investment among the younger generation.
• Plots in satellite towns such as Ngong, Matuu and Konza are demonstrating consistent value appreciation, with an 8-12% increase recorded.

Why are Kenyans Ditching the City Rentals Now?

1. High Rent Prices Yet Same Old Spaces

Truth be told, the price of rent in Nairobi has gone up over time to exceed the quality of houses available. Many Kenyans feel stuck in the cycle of making rent payments for small spaces that are not well-maintained. Many feel there is no need to keep paying rent when the same money could go into buying land in satellite towns where they can build spacious houses comfortable for them and their families.

2. Rise of Remote Jobs

Following the COVID-19 pandemic, many businesses transitioned to operate remotely. Since then, many more remote opportunities have been created, while thousands of Kenyans are also running their businesses remotely. Consequently, this freedom has allowed Kenyans to move away from the high costs of rent to quieter, remote and affordable towns where they build their own houses on small plots of land.

3. Land is becoming more Accessible

In a country where land has for the longest time been reserved for the wealthy, Username Investment Ltd. is helping rewrite the narrative by selling affordable value-added land. Today, unlike in the past, land ownership is possible even for moderate-income earners through affordable prices, flexible payment processes and ready title deeds. Fast-growing towns like Ngong, Nakuru, Konza, Matuu and Kangundo have made Kenyans realize that they can own land without breaking the bank and are now able to start building their dream homes and make better retirement plans.

4. Financial Literacy – A Shift in Mindset

Millennials and Gen Z’s are more financially empowered than any other generation that came before us. As such, they have come to learn and accept that rent money is money that is never going to come back and that it would be more profitable to invest that money in an appreciating asset like land. Kenyans are now thinking long-term about achieving financial freedom and the easy way to do this is by saving more, which they do when they do not have to pay high rental income. Why pay rent for ten years when they could use that money to buy a property and build? As such, many Kenyans are downgrading to simple living to save more money for investment. This is a big step towards achieving affordable housing as a country in a few years, more people will move into rural areas and the city will be left to breathe once again.

Why This Matters Now

Satellite towns are now offering an empowering alternative to the high rental costs, high interest rates, urban congestion and high inflation rates. Affordable housing for all is achievable if Kenyans continue to buy plots in satellite rural areas and build gradually without the burden of loans. This is a highlight of how ordinary Kenyans continue to make extraordinary moves towards financial freedom, yet build generational wealth through land.