- Hass Consult has expanded its index to cover house prices in 18 of Nairobi’s suburbs and 14 of its satellite towns.
- As king prices accelerated in the third quarter, up3.9 percent on the previous quarter
- Properties in low and middle income areas saw the largest shift up 3 per cent in the quarter compared to a marginal shift of 0.1 per cent in high income areas
- Low and middle income homes buyers in Athi River have been hit the hardest as house prices went up 6.3 per cent as developers react to the increased cost of loans. Kiambu and Limuru followed suit at 4 and 3 per cent respectively.
- Rent rises slowed down sharply up only a marginal 1.6 percent in Q3 driven by a 0.5 percent fall in apartment rents.
- The total returns on let properties are now highest for semi-detached houses, at 23.5 percent, followed by apartments, at 23 per cent and detached houses, at 10.9 per cent
Nairobi, 21st October 2015: Hass Consult today unveiled the results of its third quarter property prices indices, expanded to cover house prices Nairobi’s suburbs and satellite towns and revealed a surge in asking prices for properties and rise in rents that signifies continued growth of returns in the housing market against the slowdown in the Kenyan economy.
“Asking prices for property on sale in Nairobi’s satellite towns have risen by 3 per cent compared to the previous quarter, the biggest upswing in almost 2 years. Low and middle income homes buyers in Athi River have been hit the hardest as houses went up 6.3 per cent compared to the previous quarter,” said Ms Sakina Hassanali, Head of Research and Marketing at HassConsult.
Home owners in Kiambu, Limuru, Mlolongo and Kiserian have also been affected with house price inflation with properties for sale going up by 4 per cent, 3 per cent, 2.4 and 2.1 per cent respectively.
The weakening Kenyan shilling has led to the Central Bank of Kenya raising the Central Bank Rate (CBR) to the current 11.5 per cent. The Kenya Banks’ Reference Rate (KBRR) has subsequently been revised by the government from 8.54 per cent to 9.87 per cent. “The new lending rates took effect in the quarter thus affecting the developers who still have to repay their loans. This coupled by higher mortgage rates has led to the increase in asking prices for property in the satellite towns,” explained Ms Hassanali.
However, compared to the surging prices in the low and middle-income segment, Nairobi’s high end suburbs which mainly target the cash buyers have seen marginal adjustment in asking prices in the third quarter, up 0.1 per cent on previous quarter, and 9.4 per cent a year earlier.
Asking prices for rents slowed down at 1.6 per cent for all properties in Q3 while apartments recorded a marginal fall of 0.5 per cent down from a rise of 1.1 per cent that was experienced in Q2.
The quarter three results reveal strengthening total returns on rented property which is a measure of both capital growth and rental yield with semi-detached houses leading at 23.5 per cent, followed by apartments, at 23 per cent and detached houses, at 10.9 per cent per annum.
“These returns go against current micro-economic climate as in the same period last year the total annual returns on let properties were at 16 per cent for Semi-detached houses, followed by apartments at 13 per cent, and detached houses at 10 per cent,” said Ms Hassanali.
The Hass composite house price index is based over 6500 property prices per quarter. Over the six years since its launch has tracked more than 110,000 house price records from across Kenya.
For more information, please contact:
Head of Research & Marketing
HassConsult Limited | ABC Place, Waiyaki Way | P.O. Box 14090 – 00800 Nairobi, Kenya
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