Overall house prices rose 0.42 percent during the third quarter of 2017 as investors continue to employ a wait and see attitude.
According to the Housing Price Index report released by the Kenya Bankers Association (KBA) indicates, there has been a generally depressed demand in the economy and slowdown in credit expansion.
KBA notes that the current political environment has also had an impact on the real estate sector where potential home buyers are holding back decisions to invest in home ownership while investors are not keen to put their money on projects just yet.
The survey noted that “the sluggish demand environment has provided little incentive for increased supply of housing units, a situation that is compounded by the constrained supply of financing.”
During the period under review, apartments accounted for 82.66 percent of the total number of units sold in the third quarter of 2017 with maisonettes and bungalows accounting for 10.70 percent and 6.64 percent respectively.
According to the survey, the rise in the price of apartments compared to bungalows and maisonettes signals an element of the search for affordability by potential home buyers are given the lower cost of construction per unit on the developer’s’ side and therefore relatively low offer process.
As a consequence, market activity appears to be skewed towards the lower end compared to the middle and the upper market segment.”
A slowdown in credit expansion has also affected the sector where people who rely on credit to acquire homes have had to deal with the negative effects of depressed credit availability.
Since the base period of the first quarter of 2013, house prices have risen by 17.59 percent as at the end of the third quarter of 2017.