Knight Frank (KF) reports that house prices in Nairobi prime residential market fell by 5.4 per cent in the year to September.
KF Prime Global Cities Index (PGCI) for Q3.2019 shows changes in prime prices across all 45 cities averaged 1.1 per cent in the year to Q3.2019.
However, it was an improvement in comparison to 3.4 per cent in a similar period in 2018 and 4.2 per cent in 2017.
The price decline placed Nairobi 43rd amongst 45 cities covered by the index, demonstrating the ongoing pricing correction.
The report attributes the slower pace in Nairobi to a softening market, oversupply, and distressed properties.
On top of that, the prevailing macro and micro conditions have further contributed to a sustained price correction.
READ ALSO: House Prices Fall Further as Demand Slumps – KBA HPI Q3 2019
Anthony Havelock, Head of Agency at KF Kenya, blames illiquidity for the rising number of distressed properties in Nairobi. In this case, lenders are intensifying efforts to recover non-performing loans through the sale of collateral. he also expects normalcy in the wake of the interest rate repeal thus return of liquidity in the market.
Moreover, the report says that Nairobi’s rates have shown variations in the last three years since Q3.2016. Despite the slowdown, the values are 30 per cent higher in comparison to Q4.2010
The PGCI is a valuation-based index tracking the movement in prime residential prices in local currency across 45 cities worldwide.
In addition, factors influencing global buyer sentiment include slower economic growth and US-China trade tensions. Moreover, buyers care about Hong Kong political uprising, Brexit uncertainty, and forthcoming US presidential election.
RELATED
- Delays in processing construction permits are hurting the economy
- Prices of Nairobi’s Prime Properties suffer worst fall in history
