Houses in Runda. PHOTO | FILE
Tenants in Nairobi could be headed for a real reprieve after a
second survey revealed stabilising housing prices in the last quarter of
2015.
The Kenya Bankers Association Housing Price
Index for the quarter, released Wednesday, attributed the stability to
an increased supply of apartments and a growing middle class preferring
to own rather than rent houses.
KBA director of
research Jared Osoro said the market is on firm ground, in line with the
improved microeconomic environment, including a stronger currency and
stable economic growth.
“Most areas traditionally
developed for rentals are now shifting to develop for sales to respond
to the market. Houses put up for rent will, therefore, start becoming
less attractive as more people seek to own houses.
Increased supply
There
is also an increased supply of apartments, which are also coming up in
areas usually preserved for single units and investors seek to get more
returns,” said Mr Osoro Wednesday.
According to the
survey, the average house prices in Kenya rose by a mild 1.14 per cent
in quarter four, compared to 1.25 per cent in quarter three of 2015. KBA
says the slower change in house prices in the past three years,
averaging a single digit over the 8.19 per cent, is a sign of “a
possible softening in the underlying rate of price change.”
A
similar survey released on Monday by HassConsult pointed at a drop in
rental yields, with apartment landlords experiencing the biggest revenue
dip of 2.3 per cent.
The bankers association chief
executive Habil Olaka said the construction industry had received
massive support from the financial institutions, enabling it to put up
more housing units. He said the market will, however, remain less
volatile so as not to deter potential investors.
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