- In Kenya, there are apps to make it easier to find a home by connecting tenants directly to landlords whose homes match the potential tenant’s specifications for a small fee.
- Real estate prices in some areas are inaccessible for part of the population, and this is a challenge for people looking for quality accommodation on a low budget.
Africa’s urban population has boomed over the past 35 years, with an increase in the number and size of towns and cities, playing a key role in promoting rural-urban migration for millions of citizens who seek a better fortune and a better standard of living. across the continent.
This demographic boom was not accompanied by supply, however, as housing production remained well below targets and even further below housing demand.
Most of the urban population, especially low-income households, cannot afford to buy or build their own homes, and therefore most housing in cities is rental.
In Kenya, for example, according to the 2019 census, a total of 4,660,027 Kenyans live in rental accommodation. Of this number, 3,669,425 people rent in urban centers while 990,602 rent in rural areas. It is also estimated that 22% of the Kenyan population in major cities lives in slums.
The coronavirus pandemic has led to a collapse in real estate sales. People are not seeing properties for sale and transaction volumes are also expected to decline in 2022.
Affordability is a major constraint to the growth of housing and mortgage markets, and a major challenge to access to decent housing. As a result, only around 20% of Kenyans living in urban areas own the homes they live in.
The rental housing industry is complex and involves both the interests of tenants and property managers. Recently, there has been an increase in the presence of digital platforms within this space seeking to bridge the gap between property managers and tenants.
Despite the advent of such market technology, both sides of this divide often face challenges, especially when it comes to meeting their obligations for a successful rental.
As a tenant, the first hurdle is usually finding a suitable home. House hunting in Africa is slowly evolving into an extreme sport. While it can be an adventurous and exciting exercise, especially when finally emerging from your parents’ nest, it can also be a nightmare, both emotionally and financially.
Added to this is the risk of being scammed when a simple request to visit a house turns into a relay, where potential candidates pay a small fee before even reaching the real owner.
In Kenya, there are apps to make it easier to find a home by connecting tenants directly to landlords whose homes match the potential tenant’s specifications for a small fee.
The second obstacle, most often encountered by the tenant, is the price. As mentioned, property prices in some areas are unaffordable for segments of the population, and this is a challenge for people looking for quality accommodation on a budget.
The key to these high costs is the fact that new tenants often have to pay a security deposit plus the first month’s rent to access the home.
To solve this problem for tenants and landlords, onboard financing platforms are starting to play a key role. In the United States, fintech companies are creating products designed to improve the financial lives of tenants and managers.