Hass Consult head of marketing and research Sakina Hassanali speaks during the release of the Hass Property Price Indices for Q1 2014 at Hilton Hotel, Nairobi, on April 24, 2014. Photo/BILLY MUTAI
What you need to know:
Strongest increases seen in asking rents for townhouses.
Increased demand for top end houses sparked a revival in the market in the first quarter of 2014, the Hass Consult property index shows.
House sales and average prices in Nairobi’s main suburbs stagnated in 2013 and in some cases dipped due to low demand, especially from first time buyers.
The index, jointly compiled by Hass Consult and The Mortgage Company (TMC) Africa, shows that the sales prices for apartments rose by 2.3 per cent compared to the fourth quarter of 2013, while those for detached and semi-detached houses were up 1.8 per cent quarter on quarter.
The average price for a detached house in the quarter stood at Sh35.3 million, for a semi-detached house (town-house) was at Sh19.7 million while that of an apartment was Sh12.5 million.
On the rental side, the strong inflationary trend continued into the first quarter. Rentals for detached houses and apartments rose a further 2.3 per cent during the quarter.
The strongest rises, however, continued to come in the asking rents for semi detached or townhouses, rising a further 2.7 per cent in the quarter to take the annual rise to 18.1 per cent,” said Hass Consult head of marketing and research Sakina Hassanali.
Property sales were strongest in March, with buyers less conservative than they were in 2013 when there were concerns over the general election.
According to Ms Hassanali, demand for houses is strongest at the lower end of the market, but in this segment financing options are almost non-existent.
This has rendered the private sector property market a high end affair due to the ability of the wealthy to purchase property using cash rather than through mortgage or other forms of financing.
The townhouses are attracting mainly the middle class who would otherwise afford to buy their houses, but are opting to rent due to high interest costs on mortgages.
TMC Africa chief executive Caroline Kariuki said the trend, which has persisted for the past one year, is unlikely to change unless there is a shift in house financing which has seen banks maintain big margins on mortgage loans.
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