Diaspora remittances impact East Africa’s real estate market

Diaspora remittances to East Africa have reached an all-time high of $4.95 billion in 2024, marking an 18% increase from the previous year. This surge in remittances has caught the attention of investment companies and real estate developers, who are now strategizing to tap into this lucrative market. CNBC Africa recently spoke to Churchill Winstones Ochieng, CEO of SIC Investment Cooperative, to discuss the trends driving this surge and the potential impact on the real estate market. Ochieng highlighted the importance of creating credibility and trust with diaspora clients to attract their investments. He emphasized the need for institutions to offer reliable and accessible services to cater to the diaspora's demands. The growing role of diaspora capital in the real estate market presents both opportunities and challenges for developers and policymakers. Ochieng mentioned that the pace of real estate development projects needs to align with the demands of diaspora investors. Additionally, government policies, particularly concerning taxes, play a crucial role in encouraging diaspora investment. Tax incentives such as holidays or reductions can incentivize diaspora investors to participate in the market. Looking ahead, Ochieng predicts a significant increase in companies targeting the diaspora market. This influx of competition will lead to innovation and creativity in product offerings, as companies strive to meet the diverse needs of diaspora clients. Collaboration among companies is expected to rise as they work together to navigate the complexities of reaching the diaspora clientele. The paradigm shift towards diaspora-focused strategies is already underway, with many companies reevaluating their approach to cater to this growing market segment.