Kenya Bankers Association House Price Index (KBAHPI) last year linked the negative state of the housing prices to the oversupply of properties in the high-end areas. The house prices declined by 2.28%, a high rate compared to 1.72% in the third quarter of 2019. According to the report. This was an indication of a developing trend where the prices transitioned from a positive trend in the year 2014 to a continuous negative trend.
The COVID-19 pandemic has made things worse as the trend of softening prices has been sustained from last year. This is a pointer to the long-lasting effect that is expected to hit the market.
In the year 2019, the housing prices were based on the size of the house, location and amenities due to the trend of supply-demand imbalance. On the supply, there was a 25% increase in the number of available housing units during the last quarter of the year. This was a pointer to the oversupply in the market, being a hindrance for new properties entering the market. The supply was also characterised by the sudden decline in approval of housing plans, a slump in the manufacture of cement and consumption, with soft growth in approach of building and construction industry compounding the narrowing off momentum.
On the demand side, there was a disconnection of general output growth in the economy and effective demand by the potential home buyers. Also, the high credit rates have seen a decrease in approach to units hence greatly affecting the ability to access financing to enable one to buy a home. KBA research and policy Director Mr, Jerad said the household expandable incomes remained constrained in the year 2019, explaining the low uptake of properties.
However, apartments were doing well in the business as they dominated the market with most buyers preferring them, reigning the middle-income segment of the population. In a KBA-HPI inter-quarter sub-regional findings, some regions had a bigger decline in prices of apartments while others showed appreciation of the prices for bungalows.
Athi River, Mlolongo, Mavoko, Nakuru, Ngong, Ruaka, Syokimau, Embakasi, Kahawa Wendani, Thika, Mtwapa, Utange, Kitengela, Kiembeni, Nyeri, Likoni, Eldoret, Ruiru, Kilifi, Thika road, Meru, Bungoma were some of the locations that showed appreciation in the price of bungalows and also the apartments did not show as much decline in prices.
Kiambu, South B, South C, Kabete, Komarock, Imara Daima, Membley, Buruburu, Rongai, Waiyaki Way, Mbagathi Road, Ngong Road, Langata. Kileleshwa, Kilimani, Lavington, Westlands, Spring Valley, Riverside, Milimani (Kisumu), Milimani (Nakuru), Runda, Karen, Garden Estate, Parklands, Ridgeways, Muthaiga, Loresho, Kitisuru, Adams Arcade, Nyali, Mountain View, Nyari were some of the areas that recorded a decline the prices of their apartments.