Real Estate Market Blooms as Dust over Election Settles

By Juma / Published April 24, 2018 | 6:01 am



Real estate funding

The real estate sector in the country has started to bloom after a tough year in 2017 that was characterized by prolonged electioneering periods.

According to a report released by Hass Consult, the real estate market performance in the first quarter of 2018 recorded an improvement following the conclusion of the prolonged electioneering period.

The asking prices for residential property sales increased by 2.4 percent during the quarter, while the asking rents also increased by 1.0 percent during the same period.

Land recorded an overall 1.4 percent quarter-to-quarter increase in asking prices, with satellite towns recording a 2.4 percent quarter-to-quarter growth in land prices, outperforming Nairobi suburbs, which recorded a 0.2 percent increase, indicating that in the land sector, the pockets of value lie mainly in satellite towns.

In terms of apartments, Lang’ata was the best performing suburb recording sales price appreciation of 2.5 percent attributed to its proximity to the CBD and affordability compared to the high-end units in its neighborhood such as Karen.

Lavington was the worst performing with asking prices declining by 1.5 percent, attributable to the increase in the supply of apartments in the area and its environs.

In terms of detached housing units, Eastleigh was the best performing suburb with a sales price appreciation of 2.1 percent attributable to the high demand for affordable housing in the area.

Once again, Lavington was the worst performing suburb for detached houses with asking prices declining by 1.5 percent attributable to the rezoning of the area allowing for high rise developments, hence no longer being attractive for buyers seeking detached units, due to the increase in congestion,

Ngong was the best performing satellite town for both detached units and apartments, recording a sales price appreciation of 3.7 percent and 2.8 percent respectively.

The performance is attributed to the ongoing infrastructural developments in the area such as the expansion of Ngong Road, the Southern Bypass, and the Ngong-Kimuka SGR Station, all of which are opening up the area thereby driving demand for real estate.

Juja was the worst performing town in the apartments segment with asking sales price declining by 0.3 percent while Syokimau was the worst performing in the detached houses segment with asking sales price declining by 0.4 percent. For both towns, the slowdown in appreciation rates was attributable to low demand due to their locations on the outskirts of Nairobi that are unattractive to potential clients,

Semi-detached units were the best performing typology in the market, recording a sale price appreciation of 2.8 percent in Q1’2018.

In Q4’2017, the typology recorded a sales price appreciation of 3.4 percent compared to a decline of 1.1% percent for apartments, and an appreciation of 0.7 percent for detached units.

This is different from the norm where typically apartments have been the best performing typology. The higher performance of the semi-detached units is attributed to the high demand for semi-detached units by the increasing upper middle-income segment against low supply for the same, as developers focus on detached units for the high-end segment and apartments for the middle-income segment.

The rental markets’ performance was in tandem with the sales market with asking rentals across all property types increasing by 1.0 percent.




About Juma

Juma is an enthusiastic journalist who believes that journalism has power to change the world either negatively or positively depending on how one uses it.(020) 528 0222 or Email: info@sokodirectory.com

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