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Kenyan House Prices Record 0.54pct Plunge in Q1 on Weaker Buyer Demand

Land prices in Nairobi have shown strong signs of recovery, with satellite and the metropolitan areas recording 2.5 per cent and 0.3 per cent of pre-Covid levels, according to a report by Hass Consult.

Nairobi Metropolitan, Karen Area PHOTO: KHUSOKO

  • Townhouses dominated the market at 45 percent, edging out apartments.

House prices dropped by 0.5 percent in the first quarter of 2020, according to the Kenya Bankers Association – House Price Index (KBAHPI).

This was 0.1 percentage points lower than the 0.6 percent recorded in the last quarter of 2019. KBA said this the fifth consecutive quarter that the sector is witnessing a deceleration.

This was attributed to a constrained ability of potential buyers to afford homes currently on offer in the market.

The sale numbers point to a market where bungalows accounted for a 33 percent demand increase while the demand for bungalows and maisonettes went down by 95.9 percent and 57.1 percent respectively during the quarter.

‘’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,’’ noted KBA Research and Policy Director Mr. Jared Osoro.

Unlike previous quarters where apartments dominated house demand, townhouses were the most preferred in quarter one of 2020 at 45 percent followed by apartments ( 33 percent) and maisonettes (12 percent).

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78.0 percent of market activity occurring in cluster 2 which included areas such as: Thindigua (Kiambu Road), Kiambu, South B, South C, Kabete, Komarock, Ngong Road, Lang’ata and Waiyaki Way, fuelled by the affordability of the units mainly to the middle-class population.

Cytonn Real Estate in a comment further collaborated the KBAHPI report for the quarter stating that:  “The market comes into balance after a prolonged period of sustained price growth.”

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