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House prices in Kenya increase by 1.4% in the first quarter: survey

Xinhua, April 29, 2016 Adjust font size:

The property market in Kenya recorded an increase during the first quarter of 2016, representing a reversal of the mild decline in the rate of growth seen in the previous quarter, a survey released on Thursday shows.

The Kenya Bankers Association (KBA) Housing Price Index, which measures the average home prices, increased by 1.4 percent during the first quarter of 2016 compared to a 1.14 percent rise in the last quarter of 2015.

KBA chief executive Habil Olaka told reporters that whilst the market movement represents increase in house prices, it depicts a sense of market stability, given that such increases have been mild.

"The demand and supply dynamics have not been subject to significant change over the period. The supply of housing units has been in response to the broad demand characteristics in the market as reflected in three factors," Olaka said.

He said the new units being put up in the market mainly targeted the middle end of the market, with the lower end experiencing supply constraints arising mainly from the tendency of developers inclining towards renting than selling.

According to the survey, there has been a sense of taste consistency amongst home buyers.

The limited change in reference characteristics during the first quarter was reflected in the influencers of price movements remaining the size of the house .

Besides size, houses in gated communities will tend to be highly priced given the superior ambience associated with controlled development, security, privacy and scenic value.

Similarly, proximity to social amenities such as shopping malls, schools, hospitals and presence of parking lot among others significantly contributed to price rise in the quarter, it says.

Olaka said support of the financial sector generally and the banking industry particularly towards home acquisition has been enabled by a generally stable significant financial environment.

"The third factor revolves around the gradual opening of new geographical areas for housing development in response to physical infrastructure expansion, especially transport," Olaka noted.

The country's housing market continues to be driven by middle class Kenyans' desire to own homes.

For a long time, owning a home in Nairobi and other urban areas has been the preserve of the rich and those with good credit ratings.

However, in the last decade middle-income earners have marshaled their resources in order to move to the outskirts of Nairobi in their quest to own houses. Enditem