House Prices Fall as Developers Struggle to Market Unsold Properties

The Hass Property Index released its quarter two report for 2019 on 24^th July 2019 in Nairobi revealing that house prices had fallen by 3 percent

According to the Hass Property Index report detached house prices had dropped by 4.5 percent in the quarter, making them best for bargain hunters.

“We have seen an increase in distressed properties in the market as reflected by advertised property auctions,” said Sakina Hassanali, the Head of Development Consulting and Research at Hass Consult.

Sakina also noted that developers are offering generous terms that continue to suppress prices and rents to the point where investors are opting for safer short-term investments while they cherry-pick the best bargains in the market.

Sakina dispelled fears of a property bubble burst in the Kenyan market, saying that access to cheap financing was not there.

“A bubble is turbo-charged by cheap finance, we don’t have cheap finance, right now what’s happening is for someone to buy a property, they actually have to have all the money for it,” Sakina explained.

Sakina noted that Kenya was not at any risk of a bubble and only experiences slowdown.

Juja had the highest drop in house prices over the quarter falling by 4.1 percent while apartment prices in Athi River rose by 2.8 percent within the same period.

Rental prices in Athi River recorded the biggest drop among the areas sampled with a reduction of 3.9 percent.

Land prices in Nairobi suburbs remained fairly still while those of satellite towns rose by 3.2 percent.

Upper Hill, which had prices rise up making it a development hotspot, now has the fluctuation relaxed following the stock of commercial property remaining vacant and expected glut as more properties come to the market.

Upper Hill, however, remains the most expensive with an acre going for 550 million shillings.

Unclear validity of land documents was reported to have largely affected land pricing in a number of areas.

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