Kenya’s real estate sector rebounds as housing prices end months of decline
Published on: November 13, 2020 04:15 (EAT)
The price of houses advertised for sale have rebounded ending months of depreciation in what is a marker for a potential restart in Kenya’s real estate sector. According to the Hass Consult House Price Index published on Thursday, overall house prices remained static in the quarter to mark a 0.3 per cent increase over the third quarter of the year to September 30. Similarly, investor returns from rented units have improved by 2.5 per cent over the quarter. The prices of apartment units are however yet to climb back into gains declining by 1.5 per cent in the period. Hass Consult Head of Development Consulting and Research Sakina Hassanali has attributed the resilience in housing prices to the demand for units predominantly in high end suburbs which has held up in spite of COVID-19 shocks. “Most buyers of high-end houses are looking for properties that offer consistent or stable returns regardless of the state of the overall property market. Additionally, buyers who want that dream home in some of the exclusive neighborhoods are prepared to pay a premium,” she said. From the housing index, Kileshwa had led the price surge within Nairobi suburbs while Tigoni leads the growth in surprise in the satellite towns. The findings from the index closely mirror the Kenya Bankers Association (KBA) Housing Price Index which showed a contracted deceleration in housing prices over the same quarter to a mere 0.08 per cent. The KBA housing index has retained a negative house price curve in all preceding quarters since December 2018 with the largest slump in home valuations coming in the first quarter of 2019. Besides suffering complications from the COVID-19 pandemic which hit in the second quarter of the year, the housing market continues to ail from an imbalance in demand and supply which has left more housing units than there are buyers. Meanwhile, land prices have retained a deceleration trajectory with the Hass Land Price index a 0.94 per cent quarterly side to December taking the year on year slide to 2.17 per cent. The greatest decline in land prices was recorded in Riverside among the suburbs at a -3.8 per cent while Kiambu saw the greatest decline among satellites towns at 5.2 per cent.