There was an increase in uptake of apartments compared to stand alone houses in Q4 2018 as Kenyans are looking for cheaper houses to live in, says Kenya Bankers Association – Housing Price Index released in February 2019,
The Q4 2018 saw a reversal of preferences where apartments accounted for 76.27 per cent of the total number of units sold followed by bungalows and maisonettes at 12.12 and 11.62 per cent respectively.
This is a shift from the Q3 2018 where bungalows accounted for 37.84 per cent, maisonettes accounted for 35.14 per cent and apartments accounted for 27.03 per cent of the total market transactions.
“The extent of dynamism in homeowners’ preferences with respect to house types reveals the rapid shifts in preferences among homeowners and the rise in demand for apartments should be seen in light of its affordability to home buyers…” says KBA in its HPI report.
Further, house prices increased marginally by 1.49 per cent in the Q4 2018, reversing the downward trend that prevailed in the preceding three quarters of the year.
According to the KBA- HPI, the pattern mirrors the price evolution experienced in 2017 with indications that the slow pace of price growth experienced in the past quarters will continue to prevail.
The Index notes that while the modest rise provides respite from the depressed price outlook, it reflects the general house-price stability, attributable to the supply-demand dynamics in the housing market.
“On the supply side, the market appears to be tilting towards few additional units coming into the market due to constrained access to credit by developers,’’ it says, adding that limited credit is a binding constraint on the demand side.
The KBA-HPI further shows that homeowners’ preferences have shifted to new buildings, with buyers exhibiting a strong preference for more floorspace. This suggests that developers can benefit from increased plinth area by opting for higher-density developments.