The real estate sector in Kenya has taken a hit amid the coronavirus pandemic. The real estate market in Nakuru County has been affected by the virus adding to the property market woes. In recent months, real estate owners and agents have incurred huge financial losses and market slowdown as uncertainty continues following the government’s measures to contain the coronavirus pandemic. The country’s major towns such as Nairobi and Nakuru are already experiencing the restrictions caused by coronavirus fears in the property market. The coronavirus pandemic has led to a decline in the number of transactions and a reduced profit margin in the real estate sector.
If the Covid-19 crisis continues a high number of commercial and brokerage agents could experience a negative growth and downturn. For instance, to reduce down expenses some landlords or property owners have terminated their lease contracts with commercial agents. At least five or more agents in Nakuru have reported a reduction in property deals. Most of the land transactions and commercial leasing have been delayed or postponed due to the Lands Office closing. The coronavirus pandemic has immensely impacted many businesses as many are concerned about their job security. Land transactions on the shores of Lake Naivasha in Nakuru have been put on hold due to lack of property buyers.
There have been loan suspension disbursement to developers as most banks fear the impact on cash demand brought about by the Covid-19 crisis. The Central Bank of Kenya has taken measures by lowering the cash reserve from 5.25 per cent to 4.2 per cent to increase banks liquidity.
The decision of the Ministry of land to close all registries has considerably affected the financial value chain. The land transactions and other real estate business are major contributions to the local economy. During this difficult period, very few tenants have been able to move houses as most of them are monitoring the current situation. Some tenants have been unable to comply with the demands of agents that rental fee is collected at the agreed dates. The income of many tenants has been disrupted resulting in a slowdown in payment of rents.
The closure of the land registry has affected legal and land proceedings. The suspension of succession matters that had been concluded at the courts is likely to be prolonged, furthermore causing anxiety among families. This might cause further conflicts in families pursuing to inherit properties of their kin. The coronavirus pandemic has caused potential homebuyers to hold back due to fears. Many have postponed their transactions adopting a wait-and-see attitude. The virus has affected many property owners globally, as more disruptions are expected if the Covid-19 crisis continues.