The Property market for the second quarter of 2019 in Kenya continue to reel from slow economic growth that has seen prices reduce by 3 percent in the quarter, Property developers, HassConsult said in a report unveiled on Wednesday.
According to the report, slowed growth has reduced liquidity in the market and in the process making developers cut prices which has presented opportunities for investors.
“We have seen an increase in distressed properties in the market as reflected by advertised property auctions. Additionally, developers are offering generous terms which continue to suppress prices and rents to the point where investors are opting for safer short-term investments while they cherry-pick the best bargains in the market,” said Ms. Sakina Hassanali, Head of Development Consulting and Research at HassConsult.
Investors active in the market are buying properties at discounted prices confident that once the economy picks up there will be liquidity which will be immediately be reflected in the property market through increased prices.
“Despite the drop in asking prices it is important to note that property is a long-term investment and has historically performed better than other asset classes in the long run,” noted Ms. Hassanali.
The quarterly price deductions were led by Juja with houses in the satellite town in the outskirts OF Nairobi, dropping by 4.1 per cent.
Athi River, in the outskirts of Nairobi had the best property market with apartment prices in the area increasing by 2.8 per cent over the same period.
On an annual basis Nyari in Nairobi was the best performing suburb with houses in the area increasing by 13.2 per cent while at the tail end was Kilimani in Nairobi with apartments in the area dropping by 4 per cent.
On the letting front asking rents dropped by 1.9 per cent in the quarter led by the detached housing segment which dropped by 3.2 per cent over the period.
Langata in Nairobi recorded the highest quarterly increase in asking rents at 2.5 per cent over the quarter while Athi River recorded the biggest drop at 3.9 per cent.
JK/abj/APA