Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
The Index further associates the sustained decline in prices to an elevated level of nonperforming loans in the real estate and the construction sector, which has further contributed to the prices slump by constricting private sector growth/COURTESY

Kenya

Economic slowdown decreases house prices by 0.61pc in Q419

The Index further associates the sustained decline in prices to an elevated level of nonperforming loans in the real estate and the construction sector, which has further contributed to the prices slump by constricting private sector growth/COURTESY

NAIROBI, Kenya, Feb 3 – House prices maintained a downward trend in the fourth quarter of 2019, according to the Kenya Bankers Association House Price Index (KBA-HPI).  

The report attributed the performance to an overall slowdown in the performance of the economy, which in turn tightened disposable income growth among potential home buyers.  

During the period under review, house prices decreased by 0.61 percent compared to the 2.28 percent decline that was reported in the previous quarter.  

The Index further associates the sustained decline in prices to an elevated level of nonperforming loans in the real estate and the construction sector, which has further contributed to the prices slump by constricting private sector growth. 

In addition, the findings show that a rising distressed properties overhang continues to have a bearing on house prices, shaping market expectations and causing dealers to align by reducing their asking prices. 

“This negative feedback loop has clouded the house market outlook and led to price rediscovery in favor of a downward correction,’’ said KBA Director of Research and Policy on Financial Markets Jared Osoro 

He also noted a sustained five-year market correctionalbeit with modest price increases. 

In the reviewed period, most homeowners’ preferences remained skewed to apartments.  

While apartments retained their market dominance, their market share came down from 85 in the previous quarter to 74 percent.  

Preference for marionettes rose from 10 percent in the past quarter to 17 percent, with bungalows registering a preference rate of 9 percent.  

Advertisement. Scroll to continue reading.

Overall, homes with more bedrooms, bathrooms and plinth areas attracted higher prices.  

On the other hand, buyers preferred low-density buildings, with houses in areas such as Athi River, Mlolongo, Ruaka, Syokimau and Ruiru being priced higher than those in places such as Kiambu, South B and C, Kabete, Waiyaki Way and Langata among others.  

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...