Home ECONOMY House prices decrease marginally – KBC

House prices decrease marginally – KBC

by biasharadigest
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House prices maintained a downward trend in the fourth quarter of 2019, cemented by an overall slowdown in the performance of the economy, which in turn tightened disposable income growth among potential home buyers.

According to an analysis of price movements by the Kenya Bankers Association House Price Index (KBA-HPI), house prices decreased by 0.61 per cent compared to the 2.28 per cent decline that was reported in the previous quarter.

The Index further associates the sustained decline in prices to an elevated level of nonperforming loans in the real estate and the construction sector, which has further contributed to the prices slump by constricting private sector growth.

In addition, the findings show that rising distressed properties overhang continues to have a bearing on house prices, shaping market expectations and causing dealers to align by reducing their asking prices.

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“This negative feedback loop has clouded the house market outlook and led to price rediscovery in favour of a downward correction,’’ said KBA Director of Research and Policy on Financial Markets Mr Jared Osoro, observing a sustained five-year market correction albeit with modest price increases.

In the reviewed period, most homeowners’ preferences remained skewed to apartments.

While apartments retained their market dominance, their market share came down from 85 in the previous quarter to 74 per cent.

Preference for maisonettes rose from 10 per cent in the past quarter to 17 per cent, with bungalows registering a preference rate of 9 per cent.

Overall, homes with more bedrooms, bathrooms and plinth areas attracted higher prices. On the other hand, buyers preferred low-density buildings, with houses in Region 1 being priced higher than Region 2 and 3.

The KBA-HPI regions are based on clustered price ranges across several counties as follows:

Region 1: Athi River, Mlolongo, Mavoko, Nakuru, Ngong, Ruaka, Syokimau, Embakasi, Kahawa Wendani, Thika, Mtwapa, Utange, Kitengela, Kiembeni, Nyeri, Likoni, Eldoret, Ruiru, Kilifi, Thika road (Kasarani, Roysambu, Ruaraka), Meru, Bungoma.

Region 2: Thindigua (Kiambu Road), Kiambu, South B, South C, Kabete, Komarock, Imara Daima, Membley, Buruburu, Rongai, Waiyaki Way (Uthiru, Regen, Kinoo, Kikuyu), Mbagathi road, Ngong Road, Langata.

Region 3: 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.

 

 

 

 

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