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Economy

Rent for one-room houses rises the most in five years

A block of flats in Mlolongo, Machakos County.
A block of flats in Mlolongo, Machakos County. FILE PHOTO | EVANS HABIL | NMG 

Rent for two-bedroom bungalows rose the slowest over the past five years as tenants of single-room houses absorbed the steepest rise in changes that have seen the poor suffer most.

Official data shows that rent for two-bedroom bungalows has risen by 16 per cent to an average of Sh29,829 per month since October 2013, while that for one-room units increased 30 per cent to Sh4,416 over the period, according to the latest data from the Kenya National Bureau of Statistics (KNBS).

This means tenants of two-bedroom units have benefited from slower rent rise while landlords who have put money in single-room houses have raked in higher returns.

Three-bedroom maisonettes recorded an 18 per cent rise to Sh36,241 in the five-year period to October, while rent for two-bedroom flats grew 26 per cent to Sh21,344.

Most gains

The KNBS report does not track the rent for one-bedroom houses. The rent data means that developers of single-room units, popular with low income earners, have gained the most in terms of rate of returns on their investments especially in major towns.

They are followed by investors in two-bedroom flats and three-bedroom maisonettes, while bungalows are bottom amid concern of a glut in the high-end housing segment.

Most of the urban poor opt for the small units whose charges fit their meagre budgets.

Two-bedroom flats also fit within the budgets of the middle class and their locations near or along routes to commercial districts have proved convenient for daily commute.

Low-end market

Maisonettes are often located in places further from town centres and are preferred by the rich. Analysts reckon that lower-income housing will grow faster in coming years compared to other segments amid flat demand in the high-end segment.

Investors have in the past overlooked the low-end mass market as they targeted huge returns from high-end homes.

But with most people migrating to urban centres and higher paying jobs getting difficult to find for those entering the job market, demand for small houses looks set to rise.

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