Rent soars in Kenyan property market

January 23, 2014

, Hass Consult Annual Report indicates that rents in Upper Hill, South C, South B, Thika and Nyali rose more rapidly than in any other suburb by 19 to 23 percent compared to 2012 while Lavington saw rises of up 2 percent as consumers opted for more accessible areas among them Kileleshwa and Kilimani.

Hassanali says the opening of many new headquarters and offices along Mombasa road and the heavy traffic fuelled the rise in both rents and house sales prices in the South C and South B suburbs.

In 2013 apartments took up 45.3 percent of the market while semi detached took up 20 percent of the market and detached houses took up 25.7 percent of the market.

Hassanali says Muthaiga, Brookside, Lavington, Langata and State House are experiencing falling prices with many of these areas no longer development hotspots.

She says that there has been very little uptake of mortgages backed by high interest rates that remained unchanged in the fourth quarter of 2013 at an average of 16.89 percent which has made houses unaffordable and expensive to build due to high debt burden.

“Demand is bulging in rental properties even as developers are being deterred from new construction by flat sales prices and rising cost. The sum is ever higher rent, in population made up of landlords and tenants,” she said.

Standard Chartered Bank offered the most competitive mortgage rate in the final quarter of 2013 with their limited Christmas offer of 12.9 percent with other front runners in the sector being CFC Stanbic, Barclays, National Bank and Housing Finance.

Consolidated Bank continues to offer the country’s most expensive mortgage at 19 percent followed closely by Equity Bank, Family Bank, Diamond Trust Bank and Chase Bank respectively at 18 percent.

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