Market News

Flats dominate home sales on buyers’ choice

apartments

Apartments in Makongeni, Thika. PHOTO | KANYIRI WAHITO | NMG

Apartments have accounted for the larger share of sales in the housing market for seven consecutive quarters since April 2020, pushing up prices of the properties.

The Kenya Bankers Association-House Price Index (KBA- HPI), shows apartments dominate across the lower, mid and upmarket accounting for 56.8 percent of all the completed transactions in the quarter ended December 2021, from 47 percent in the quarter ending September.

Developers put most of their investment in apartments in search of higher returns and response to demand for such units from property buyers.

Land prices in the central areas of major towns and cities are the most expensive, with apartments helping to lower the unit cost of the houses.

Apartments also make it easier and most cost-effective to share the cost of security and other services.

“Housing transactions in the lower market segment, and particularly apartments, continued to dominate during the fourth quarter. In the fourth quarter of 2021, housing transactions in the lower-market segment accounted for 58.8 percent of all transactions, compared with 70.1 percent in the third quarter,” the report says.

The share of bungalows contracted by half compared to the previous quarter, accounting for 13.3 percent of all transactions in the fourth quarter from 26.5 percent.

Maisonettes, however, rebounded to 29.2 percent in the period compared to 22.2 percent in the previous quarter.

The preference for apartments has made them more expensive, fetching prices higher than bungalows which are bigger in size.

The housing price index reveals the average price of a maisonette stood at Sh12.15 million while that of apartments and bungalows stood at Sh9.38 million and Sh6.69 million, respectively.

The average plinth area of an apartment - the covered built-up area covered by the house with inside and outside walls- was 1,283.9 square feet compared to 1,631.4 square feet of bungalows.

Bungalows were 1.2 times bigger than the apartment which would suggest it be more costly.

“The price dynamics would be determined not only by the house type but also the location where the house is,” said Mr Samuel Tiriongo the Research and Policy Director at KBA.

“For instance, it is possible to have a bungalow in one region 1 (where say low-income households stay) being much cheaper than an apartment in region 3 (the high-end),” added Mr Tiriongo.

[email protected]