Housing prices in Kenya fell for the fifth consecutive quarter as demand remained low. According to a Kenya Bankers Association (KBA) report, the downward trend is because buyers cannot afford houses currently on offer. However, the current 0.54% contraction is an improvement from 0.61% in Q3 2019.
“…house prices decelerated by 0.54 percent in the reviewed period, marginally reversing the decline by 0.07 percent from the 0.61 percent negative growth rate reported in Q4 2019. The prices have remained in the deceleration path for the fifth consecutive quarter,” reads a KBA press release.
Kenya recorded net positive growth in its housing prices for three consecutive years until 2018. However, the country experienced negative price growth since Q1 2019. The trend is a semblance of normalcy after extended periods of price growth.
“The decelerating price trend is evidence of a property market with a distinct lack of momentum and characterized by a sign of normalization of house prices as the market comes into balance after a prolonged period of sustained price growth.’’KBA research and Policy Director Jared Osoro.
Property buyers showed a preference for affordability, evident in a 33% increase in demand for bungalows. On the other hand, the demand for apartments and maisonettes fell by 95.9% and 57.1% respectively. The trend negates demand trends in previous quarters, where apartments had the highest demand.
Nevertheless, the drivers for house prices for Q1 2020 remained stable. Structural characteristics like the presence of a generator and the number of bedrooms drove prices. The building’s geographical area also affected its price, with houses in Mountain View, Riverside, and Muthaiga fetching the highest prices.