Kenya sees drop in property deals

In the midst of the hustle and bustle of Kenya's real estate market, a recent downturn has caught the attention of industry experts and investors alike. According to a report from real estate firm Hassconsult, there has been a significant drop in buying activity in the last two weeks as people adopt a cautious 'wait-and-see' attitude ahead of the upcoming elections in just under two weeks. While this trend may seem alarming, experts believe that this is a temporary slowdown and expect the numbers to rebound in the month of September. On another front, Imperial Bank Limited is back in court today, with its shareholders arguing against a 12-month extension of the receivership period. The central bank, on the other hand, claims that more time is needed to conduct due diligence. The prolonged period of receivership has left many questioning the future of the bank in the midst of ongoing legal battles and uncertainties. Adding to the mix of economic uncertainties, the fixed income market has also experienced some turbulence, with a dip in yields for the 10-year bond at the latest auction. This development has left investors and analysts grappling with the implications of these market movements amidst a backdrop of uncertainty and unpredictability. Abdul Rahman Hussein, a financial expert from AIB Capital, weighed in on these pressing issues during a recent interview. He shed light on the complexities of the current economic landscape and provided insights into what the future may hold for the real estate and fixed income markets in Kenya. Reflecting on the situation at Imperial Bank Limited, Hussein expressed concerns over the lack of transparency surrounding the need for the extension of the receivership period. He noted that while depositors have been partially reimbursed, shareholders have yet to receive a satisfactory justification for the extended timeline. The ambiguity surrounding the future of the bank raises questions about its viability and brand value in the long run. Turning to the real estate sector, Hussein addressed the recent drop in buying activity, attributing it to the upcoming elections. He emphasized that while transaction volumes have decreased, property prices have remained relatively stable, indicating a temporary slowdown rather than a long-term decline. The uncertainty surrounding the political climate has led investors to adopt a cautious approach, with many opting to wait for the election results before making significant investment decisions. Looking ahead, Hussein expressed optimism for a post-election boom in the real estate market, provided that the elections are peaceful and business activity returns to normal. He anticipated an increase in transaction volumes and a renewed sense of confidence among investors once the political landscape stabilizes. Shifting focus to the fixed income market, Hussein discussed the recent dip in yields for the 10-year bond at the auction. He attributed this trend to the government's efforts to maintain low interest rates by curbing high bids. Despite the current volatility in the market, Hussein predicted that interest rates would remain low in the foreseeable future, driven by factors such as declining inflation rates and improved liquidity. As the economic landscape in Kenya continues to evolve amidst political and financial uncertainties, investors and stakeholders are grappling with a complex web of challenges and opportunities. The coming months are poised to test the resilience and adaptability of the real estate and fixed income markets, as they navigate through a period of transition and transformation.