- KNBS data shows that the value of approvals dipped to Sh120.78 billion in the nine months to September, compared to Sh176.5 billion over a similar period of 2019.
- There were, however, no approvals made in June and July following Covid-19 lockdown restrictions.
- Over the period, demand for apartments shrank by 63 per cent, while demand for bungalows and maisonette expanded by nine per cent and 72 per cent, respectively despite an overall subdued price trend.
The value of building approvals in Nairobi dipped by Sh55.67 billion in the nine months to September amid an economic disruption caused by the Covid-19 pandemic in the construction sector.
The Kenya National Bureau of Statistics (KNBS) data shows that the value of approvals dipped to Sh120.78 billion in the nine months to September, compared to Sh176.5 billion over a similar period of 2019.
There were, however, no approvals made in June and July following Covid-19 lockdown restrictions.
“Value of residential approvals fell by Sh30.5 billion from Sh114.6 billion during the period,” the KNBS data shows.
This is as commercial segments fell from Sh61.9 billion in 2019 to Sh36.7 billion in the same period this year.
This comes at a time when the Kenya Bankers Association House Price Index showed that overall house prices contracted by 0.08 per cent in the third quarter, a marginal improvement from the 0.20 per cent contraction in the second quarter of 2020.
Over the period, demand for apartments shrank by 63 per cent, while demand for bungalows and maisonette expanded by nine per cent and 72 per cent, respectively despite an overall subdued price trend.
An overall 53 per cent of all types housing purchases were made in Athi River, Mlolongo, Mavoko and Syokimau in Machakos, Nakuru, Ngong in Kajiado, Ruaka and Thika in Kiambu, Embakasi and Kahawa Wendani in Nairobi, Mtwapa, and Utange in Mombasa.
Similarly, Knight Frank’s half-year report showed that prices of prime residential houses in places such as Karen, Lower Kabete, Runda and Muthaiga dipped by 2.9 per cent in contrast with a 1.8 per cent decline in the same period last year.
The statistics, which was released in July, indicates that land prices in most satellite towns surrounding Nairobi dropped in the six months to September at the peak of the coronavirus economic hardships that cut demand for property.
Data from real estate research firm HassConsult shows that prices of land in areas such as Kiambu, Syokimau and Kiserian dropped by between 0.54 per cent and 8.1 per cent.
This has put brakes to the feverish rises in house and land prices that had some Kenyans worried a bubble could be forming. The decline in prices in the suburbs show the strain on the real estate market due to the economic impact of the pandemic, which has driven businesses to losses and shed more than two million jobs.
The price of an acre in Kiambu dropped by the largest margin of 8.1 per cent to Sh39.7 million in September compared to Sh43.2 million in March.