Sale Asking Prices:
The second quarter has seen sale asking prices in some regions shoot up with other regions experiencing a decrease in sale prices. Some of the places that have experienced an increase in asking prices include Ngong, Loresho and Gigiri with places like Kiambu Road, Kilimani and Redhill Limuru experiencing a dip in asking prices.
President Uhuru Kenyatta’s big four agenda, with affordable housing being one of them, is projected to change the real estate sector in Kenya, particularly real estate targeting the low income earners. Government’s plan to construct 500,000 low cost houses in the next four years, has seen many players in the sector examples of Banda Homes, Urithi Housing, and Mahiga Homes, take up the challenge and play their role in the implementation of the affordable housing agenda. This initiative has given many Kenyans hope of ever owning a roof over their heads, but the downside however is that, there will be an influx of new units in the market, forcing developers to lower their asking prices in trying to remain afloat.
Rental Asking Prices:
Over the second quarter, the rental asking prices in different locations have experienced highs, lows and even stagnations. Some areas such as the suburbs are hitting the lows in rental prices compared to the satellite towns. This varies with the different types of properties under review, that is, one, two and three bedroom apartments, three and four bedroom stand-alone and the office spaces.
Falling rental prices is becoming a common trend in the property market. This is attributed to several factors within the real estate sector. Continued over supply of rental developments being one of them. The oversupply outstrips demand for the rental properties.
Since the inception of affordable housing under the Big Four Agenda by the government, people are shifting towards home ownership leading to less demand for rental properties. This therefore leads to landlords giving out discounted prices so as to retain the already existing tenants and attract new ones. Also causing the price fall, is the current economic slowdown.
In most areas, there is a decrease in the rental prices for the one bedroom apartment. Most people tend to prefer two and three bedroom apartments.
Prices for land has been going down following the government’s introduction of a land bank (public or community-owned entity created to acquire, manage, maintain and repurpose vacant, abandoned and foreclosed properties) back in 2018. In trying to achieve the affordable housing agenda, the government through the ministry of lands, decided to conduct audit of severally owned government land by parastatals and ministries, to establish land that is in excess and have it released to the public.
This will help solve the challenge faced by both local and international investors seeking to acquire land for real estate projects. This will in turn result in an over-surplus of land in the market, pushing down the prices of land which has already started kicking in, in some regions in the country. Some of the institutions under audit include, Kenya Broadcasting Corporation, International Livestock Research Institute, East Africa Portland Cement Company, Kenya Prisons, the Ministry of Agriculture and Livestock and several public universities.
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