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Housing demand will see an uptick once revival of the economy picks up from 2021 and prospective home buyers feel secure about their jobs, property consultant Hass Consult said Thursday in its quarterly breakdown.
The firm in its property index for Q3 said that the market’s overall prices remained static with just 0.3 per cent increase over the quarter and 2.27 percent on an annual basis – even though rent prices have grown by 4.08 fold since 2001.
Land prices on the other hand registered an overall marginal growth, according to the report which shows that areas like Upperhill still has the most expensive land with an acre in the suburb going for Sh512 million while in the satellite and fast-growing towns of Ruaka having the most expensive land retailing at Sh89 million per acre.
Prices in the satellite towns also recorded a decrease of 0.06 percent during the period under review because of COVID-19 pandemic.
“A few suburbs have backed the trend of falling rents which still continue as tenants are negotiating for discounts amid the tough economic environment. We have not seen a major drop in land values despite the challenges such COVID-19 and the tough economic environment proving that investors still see this as the best bet over the long-term,” said Sakina Hassanali, Head of Development Consulting & Research.
Kenya Bankers Association House Index (KBA-HPI), early this week showed that the rate of house prices growth in the third quarter of 2020 had remained flattened registering a 0.08 percent contraction compared to the 0.20 percent reported in the second quarter of the year – with the pandemic having a bearing on both the demand and supply.
“As we have argued before, during periods of a sharp contraction in economic activity house prices either remain flat or decline slightly. The fact that the decline is not as sharp is attributable to the slow response of both buyers and sellers in response to the declining economic prospects,’’ said the Kenya Bankers Association Chief Executive Habil Olaka while commenting on the KBA-HPI report released on Monday.
While the coronavirus pandemic continues to unsettle the Kenyan housing market various indications show a promising future with the recent gazettement of the Retirement Benefits (Mortgage Loans) (Amendment) Regulation, 2020 whose implementation could see more home-ownership opportunities for most Kenyans and create a pool of ready cash for developers to help fix the country’s housing gap.