According to HassConsult Real Estate’s third quarter property price index, a take-off in asking prices for properties, a slowdown in rent rises, and a restoration of the high returns on investment in the Kenyan housing market was revealed.
“Rent has been on a very upward increase since the last 18 months. We have seen a 30 per cent rise in rent and that has been a little worrying. We are happy to report that this quarter showed a very marginal increase and it has unfolded in some categories. It shows a kind of turning of tides in the property market,” Sakina Hassanali is the head of research and marketing at HassConsult told CNBC Africa.
Asking prices for properties, for apartments and detached houses, moved up significantly in the third quarter, by 3.6 per cent and 3.2 per cent respectively, while semi-detached house prices rose up 2.4 per cent from the previous quarter.
The HassConsult index is based on 4,000 to 6,000 property prices per quarter has tracked more than 100,000 house price records across the country.
Currently, Kenya’s annual housing deficit is estimated at 300,000 units. The country’s state run, housing corporation, estimates that the current urban housing needs are 150,000 units per year to cater for the backlog. However, it is estimated that the current production of new housing in urban areas is only about 30,000 units annually, a shortfall of 80 per cent.
Meanwhile, a survey by the country’s central bank revealed there were less than 20,000 mortgage loans in the country in 2013, a fraction to that of the population of the capital city Nairobi at over four million.
Nonetheless, real estate sector in the country grew by 2.6 per cent in the second quarter of 2014 according to the county’s statistics bureau.
According to the managing director at Lamudi Kenya, a global property portal focusing exclusively on emerging markets, Dan Karua the real estate growth in the East African nation is promising.
“It is without a shadow of a doubt that the property market in Kenya is strong, this is evident through the property prices in the country. The real estate sector is surely a key pointer for the growth of an economy,” Karua said.