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Kenya

Apartment sales account for over half of home buys in Q3

Apartments

During the July – September period, the average house prices recorded 2.2 per cent growth signifying sustenance of the upward trajectory./ FILE

NAIROBI, Kenya, Nov 8 – Apartments accounted for the largest share of the total sale transactions in the third quarter of 2016 at 58.56 per cent. 

This is according to the Kenya Bankers Association Housing Price Index (KBA- HPI) that indicates maisonettes and bungalows accounted for 24.31 per cent and 17.3 per cent respectively.

The report indicates that the market is however skewed in terms of regions and the type of the house.

Demand for apartments was more on the lower and middle market end while maisonettes and bungalows seem to be concentrated in the upper-end market.

The rising middle class is inclined to apartments which are likely to be more affordable as compared to maisonettes and bungalows.

During the July – September period, the average house prices recorded 2.2 per cent growth signifying sustenance of the upward trajectory.

“Even with relatively faster growth in house prices during the third quarter of 2016, the demand and supply market dynamics have not been subject to significant changes over the period,” the report indicates.

Developers now prefer to rent than sell with new units being put up mainly targeting the middle end of the market with lower end experiencing supply constraints.

Consistent with previous two-quarters, there has been a sense of taste consistency amongst buyers with the main drivers being the size of the house, whether or not the house is located in a gated community and proximity to social amenities that include shopping malls, tarmacked roads, schools, hospitals and presence of parking lot.

“This speaks to the developers’ appetite for the type of houses they put up in specific regions as being influenced by affordability as well as the type of the clientele in the region,” said KBA Director of Research and Policy Jared Osoro.

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The report, however, does not indicate any influence of the new Banking law capping interest rates up-to 4 per cent above Central Banks’ Rate.

However, according to the report, the law is likely to influence the demand and supply dynamics on the housing market based on how it will shape the flow of funds towards supporting both home ownership and housing development.

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