The value of approved buildings declined significantly to Kshs 105.7 Billion in the period January to May 2017, from Kshs 126.3 Billion in the same period last year, representing a 16.3 percent drop according to the Kenya National Bureau of Statistics.
Data from the Nairobi City County Planning Compliance and Enforcement Department, the value of approved residential buildings experienced a 21.8 percent drop to Kshs 58.1 bn from Kshs 74.3 bn in 2016.
Additionally, the value of non-residential approvals saw a decline of 8.5 percent to Kshs 47.6 bn from Kshs 52.0 bn in 2016.
“We attribute this mainly to: reduced investment from the risk-averse investors due to the elections period, constrained credit advancement from lending institutions and the oversupply in certain themes like commercial office approximated an oversupply of 3.2 mn sqft of office space in 2017,” according to Cytonn Investments.
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“The decline in activity, however, is only temporary, and we expect it to stabilize in the near-term and increase in the medium-term, supported by the positive prospects of the real estate sector,” they add.
