House prices rise marginally on interest rate drop
Posted Wednesday, January 23 2013 at 14:09
The real estate sector breathed a sigh of relief in the last quarter of last year following the gradual lowering of interest rates.
Real estate firm HassConsult Wednesday said that that the Central Bank of Kenya (CBK) lowering of the rates saw rents and sale prices of houses increase and encouraged developers to seek credit in the fourth quarter of 2012.
Hass Consult said that re-energised activity was catalysed by the CBK reducing the benchmark rate to 11. per cent from 13.5 per cent between the third and fourth quarters of 2012.
“The interest rates rate cuts in the middle and later part of 2012 brought many buyers back into the market in the latter part of the year, and also saw project financing reopen and construction work commencing that had been stalled for many months,” said HassConsult's head of research and marketing Sakina Hassanali, while releasing the annual and fourth quarter reports.
The Hass Property Index shows that rent increased marginally by 4.1 per cent in the last quarter of 2012 compared with a similar quarter in 2012. Overall rent increased by 16 per cent in 2012.
The index shows that asking sale prices increased marginally by 1.7 per cent in the last quarter of 2012 compared with a similar quarter in 2011.
The index looks at rental and asking prices of standalone houses, townhouses and apartments across 43 suburbs in Nairobi and neighbouring counties.