The Kenya Bankers Association says that housing prices growth stabilized in the third quarter amid weakened demand and supply. The report Kenya Bankers Association House Index (KBA-HPI) tracked housing prices between July and September.
In this case, KBA says that the housing prices contracted by 0.08 percent in the quarter, an improvement from the 0.20 percent contraction recorded in the second quarter of 2020. The Association attributes the contraction to a challenging economic environment on the back of COVID-19 pandemic that has hurt both demand and supply.
The pandemic led income uncertainty and low consumer sentiment are having adverse effects on the housing market. Apartments were the worst hit during the period under review, recording a 63 percent slump in demand on a quarter-to-quarter basis. On the other hand, maisonnetes had the highest growth in demand that expanded 72 percent while demand for bungalows expanded by 9 percent.
The report observes that homebuyers continue to prefer apartments as they accounted for 43 percent of the concluded transactions during the quarter.
However, KBA was quick to note that the house price stability in the quarter was due to high demand for units within the top end of the market that offset the decline in the lower segments. In addition, the report suggests that supply side weakness such as softening of cement production and consumption provided the cushioning effect on house price decline thus influencing the stabilization of house prices.
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