The property market in Kenya remains depressed in the third quarter of 2017 owing to direct result of uncertainty in the market following the announcement of a fresh election HassConsult reports.
“Overall property prices drop by 1.8 percent while asking rents drop by 0.3 percent with apartments accounting for the biggest drop for both asking property prices and rents,” reads part of the House Price Index Quarter Three Report 2017.
HassConsult notes that there was a spike in activity up 400 percent in the three weeks following the announcement of election results in mid-August as the assumption then that the electioneering period was over.
However, the Supreme Court’s directive for a new election has resulted in buyers adopting a wait-and-see approach that had been taken towards the run-up to the August 8 polls.
“We saw activity pick up from mid-August as buyers who had held off on purchasing decisions came back to the market but the current uncertainty moved sales momentum back to the pre-election period. Buyers are sensitive to risks associated with the political process and are therefore unlikely to make decisions until there is an end to this period,” said Ms. Sakina Hassanali, Head of Development Consulting and Research at HassConsult.
In the report, Gigiri is the best performing suburb up 4.8 percent over the quarter while Muthaiga is the top performer on an annual basis up 12.5 percent mainly driven by investors who see value in buying houses in the areas that serve the diplomatic corps and expatriate community.
On the rental front asking rents dropped by 0.3 percent. As the country’s political uncertainty creates a knock-on effect on economic growth, rental hikes across the country have been minimal while falls were witnessed in many of Nairobi’s main suburbs.
“A slowdown in economic activity has a direct impact on wages as firms become more aggressive on cost management. We expect the sluggish growth in incomes has resulted in a stagnation of market rents” added Ms. Sakina Hassanali.