, NAIROBI, Kenya, Apr 17 – Tenants are expected to pay higher rent this year due to expensive mortgages which are tying many potential buyers into renting.
This is according to real estate firm Hass Consult which adds that prices will also be impacted by landlords who are seeking better returns after almost two years of relative losses.
The Hass Composite Property Price Index showed that prices for rental houses in the first quarter of 2013 went up by 1.9 percent from 4.4 percent in the last quarter of 2012.
“The rental market is yet set to see further price rises, despite limited disposable income among consumers, who currently pay a far higher proportion of their incomes in rent than is the norm globally,” Head of Research and Marketing at Hass Consult Sakina Hassanali said.
The firm however says the housing market has generally experienced a slowdown in the first quarter, as purchasers held off in concluding house moves during the election period.
House prices recorded a marginal increase of 0.5 percent, driven by some continuing movement in the prices for standalone houses.
The number of completions was relatively low in the first quarter, but were significantly higher than in the first quarters of 2011 and 2012, revealing an underlying strengthening in the sales market.
In a buying cycle that typically gains momentum in the second and third quarters of the year, the volume of new business and viewings also rose sharply from January to March, suggesting an ongoing revival of activity following interest rate cuts.
“The election, which represented perhaps the biggest concern for investors of any event in Kenya for the last five years, has created some pent up demand, as investors have held off awaiting the outcome,” Hassanali said.
“However, with fears focused on a direct line impact on the Kenyan economy, buyers began to position themselves for swift purchasing ahead of further price rises in the event, as happened, that the election passed peacefully,” she noted.