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The pace of house price growth slowed sharply in the last three months to September on general cooling property market, according to House Price Index report for third quarter of 2016 by HassConsult.
Property prices increased by just 1.2 per cent during the period compared to 4.0 per cent in the second quarter – although more people are expected to continue buying in 2016 on low interest rates.
HassConsult head of research and marketing Sakina Hassanali however, cautioned that the amendments to the Banking Act 2016 that has introduced low interest rate regime, would benefit the industry in the coming months, albeit the growth would not be immediate.
“Low interest rates will give potential borrowers incentives to take up mortgages and other loan facilities but that would be gradual. But will not lead to a dramatic burble since only one percent of the market is currently mortgage financed, majority is cash driven. I don’t foresee an instant change, this will take time it will not happen overnight,” Hassanali said.
Related: House prices tipped to rise on stable interest rates
Asking rents in Nairobi marginally grew by 0.7 per cent during the period against 1.5 per cent in the previous two quarters of the year, while apartments registered the highest jump in rental charges by 1.7 per cent.
Land prices in Nairobi’s satellite towns rose by 7 per cent during the period under review – the highest ever witnessed in three years. That growth is now credited to ongoing and proposed infrastructural projects on certain towns like Juja whose land prices has tripled by 7.6 times since 2007.
“The prices tend to increase when roads and other infrastructure projects are set for development. Lands in Juja, Limuru and Ruiru are benefiting from proposed Western bypass and commuter rail projects,” she said.
Juja ranked the best performing satellite town followed by Limuru and Ruiru while Upper Hill retained top spot as the most expensive place to buy land with an asking price of Sh534million for an acre.
The survey further reveals that Nairobi’ suburb areas like Donholm and Langata also ranked high with 9.3 per cent and 7.7 per cent respectively in asking prices, with the ongoing road expansion on Donholm connecting other Eastlands areas set to push up rentals upon completion.