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Apartment glut looms in Kenya’s housing market

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Real estate investors were Monday warned to expect a temporary price falls, with an oversupply of houses and apartments kicks in.

Latest Hass property price indices for the first quarter of 2017 shows that asking rents for apartments dipped by 3.3 per cent in the first three months of the year, pulling the overall rental market to record a 0.5 per cent drop – contrasting the 2016 boom witnessed in the apartment housing supply.

Head of Development, Consulting and Research at HassConsult Ms. Sakina Hassanali attributed the shift to rapid increase in apartment stock that had been in the pipeline over the last two years.

And while property values have increased by 4.38 times since 2000, detached and semi-detached units have recorded steady growth over the years with mild increases in asking rents for the Q1 2017 of 0.7 per cent and 0.2 per cent respectively, buoyed by tightening supply of housing within the segment.

“The stock of apartments within Nairobi and its satellite towns has expanded to meet the wider demand and as more units enter the rental market landlords are reigning in asking rents to remain competitive – a boon for tenants amidst the general price increases in the economy.

On the other hand, detached and semi-detached units recorded mild increases in asking rents for the first quarter of 0.7 and 0.2 per cent respectively, mild repricing as a result of tightening supply of housing within this segment,” said Hassanali.

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