However, the CBK rate cut also saw house prices climb by 7.1 percent in the quarter under review, compared to the same period last year, the latest Property Index report from HassConsult showed.
“At the sight of the rate cuts many developers moved to push up prices, with asking prices rising more than four percent in each of July and August,” said Sakina Hassanali, HassConsult Head of Marketing and Research.
The opening of the quarter, however had some of the lowest levels of enquiries, viewing and completions seen in the sector, as most buyers held on purchases until interest rates eased, according to the report.
Hassanali says rents continued to experience the most upward pressure on prices, fuelled by those who would have been first-time home buyers choosing to stay in the rental pool.
“The third quarter also brought concerted price rises in the rental market, as landlords facing robust demand also moved to cover rising costs,” she explained.
On the mortgage front, rates moved from an average of 22 percent in the second quarter to the current 19 percent.
Barclays Bank currently has the most attractive mortgage rate at 15.5 percent, followed by Standard Chartered Bank at 16.9 percent, while Equity Bank at 21 percent and Chase Bank and National Bank of Kenya both at 22 percent, sit at the higher end of the spectrum.
“A 3.5 percent drop in the average interest rate on a Sh10 million house leads to a 16 percent drop in monthly repayments. So every percentile point makes a huge difference in the pockets of mortgage takers,” said Nathan Luesby Jenga Web Managing Director.
Experts expect a new flow of good housing stock over the next two years, following some gaps in supply in the months and year ahead, caused by the contraction in viable financing a year ago.