Market News

City building approvals drop Sh21bn in 5 months

A housing project. FILE PHOTO | NMG
A housing project. FILE PHOTO | NMG 

The value of building plans approved by the City County of Nairobi in the year to May declined by Sh21 billion, or 16.2 per cent, compared to similar period a year earlier as developers grew jittery months to Tuesday polls.

Fresh data collected by the Kenya National Bureau of Statistics shows the county approved plans valued at Sh105.69 billion in the five months, down from Sh126.31 billion in the comparable period last year.

The value of approved plans for residential property specifically slowed by more than a fifth year-on-year to Sh58.07 billion from Sh74.27 billion, a 21.81 per cent drop. The county cleared plans for non-residential buildings worth Sh47.62 billion in the five months under review — an 8.49 per cent drop from Sh52.04 billion the year before. 

Real estate is among the key sectors historically hit by the electoral process as risk-averse investors fear incurring losses in case of a disruptive dispute. The risk relates to malicious destruction of unfinished structures or a delay in occupancy.

HassConsult, a property consultancy that tracks prices based on advertisements in a quarterly survey, in July reported reduced transactions due to a wait-and-see stance by developers.

“There has been a complete drop in buying activity, which we completely expected. A lot of people have adopted a wait-and-see attitude,” HassConsult’s head of research Sakina Hassanali told a news conference on July 28.

“The real estate sector experiences a decrease in investments ahead of the polls as investors adopt a wait-and-see approach,” CEO of WS Insight, Tony Sugden, said.