By Steve Umidha
Kenya’s real estate market appears to be straining under the weight of its own pandemic –driven success, according to recent industry data and sentiments from real estate developers.
Latest figures by HassConsult for instance, shows that overall property rental prices registered a mild recovery growing by 1.1 percent in the quarter ending June 2021, attributing the slight growth to the rise in asking rental prices.
That growth, albeit, trivial is a clear indication that the sector is returning from the stratosphere, according to Geoffrey Kiragu, a director at Lesedi Developers – pitting the property market to ‘float back to earth’ to the levels seen before COVID hit, and as evidenced by a slew of data by the likes of HassConsult and Knight Frank.
“We can predict a bouncier future for the industry and as a player we are optimistic this positive trend will offer us a platform to cater for clients in bottom of the pyramid to own property, having expanded our portfolio by including quality affordable homes this year that has ushered growing requests for homes,” said Kiragu.
He was speaking during the recently held Top Score Brands Real Estate 2021 Awards in which the company was recognised as the most consistent land selling and Subdivision firm, and the most promising developer in mid-plan affordable housing development in Kenya.
The Top score Brands Real Estate Awards are held to acknowledge excellence and the need to maintain high standards within the real estate sector – an industry that is slowly healing from the pandemic shocks.
Indeed, the Knight Frank report – released last week showed that the prime residential sale prices in Nairobi marginally improved by 0.1 per cent over the past 12 months to June this year.
It attributed the weakening of the new ‘normal’ by developers and sellers who are becoming more flexible with negotiations and willing to accept lower prices as well as buyers resuming their investment plans which were halted last year due to the pandemic.
The new trend, Mr. Kiragu says, will offer deals to realtors keen to complement the Government’s agenda to put up affordable houses to its citizens.
“What you will see is a gradual shift that will see players move away from regions like Nairobi, Kiambu and Machakos and start to explore other areas like the Rift Valley in Nakuru – a region we are eying ourselves. We also intend to have projects in every county through our newest scheme dubbed Lesedi Club for Land,” said Kiragu.
That confidence is also shared by property developer, SAIF who in its property market outlook for 2021– first half, predicts that the sector will continue its recovery owing to the growing demand for residential property market and the appetite for mortgage financing models.
“With a rapidly growing population and increasing middle class, the residential sector continues to register the highest demand but affordability is a key challenge to accessing decent housing,” notes the report.
It is estimated that just 20 percent of Kenyans are living in urban areas and own the homes they live in, with a majority unable to own houses owing to high associated costs of putting up a structure.
A decent 3-bedroom house would roughly cost $1.1million in what is still a poor country in Nairobi, but with handsome rental returns ranging from between 6 per cent and 7 per cent.
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