Real estate firm HassConsult Wednesday said investors have adopted a wait-and-see stance that is impacting negatively on the volumes of transactions in the sector.
The hotly contested General Election is only a fortnight away, forcing investors to hold onto their cash.
“In the last two weeks there has been a complete drop in buying activity, which we completely expected. A lot of people have adopted a wait-and-see attitude. They probably don’t want to commit to property right now because there is a lot of media reporting on what’s going to happen after here,” HassConsult research and marketing manager Sakina Hassanali said at a press briefing in Nairobi.
Ms Hassanali, however, projected the property market will see a rebound soon after the August 9 polls.
“We expect that if all goes well and we have a peaceful election that this will probably rebound in around September; but for now it has been quite in July for sure,” she said.
Ms Hassanali spoke when HassConsult released its quarter two property index that showed sales in the city’s overall property market have cooled by 3.1 per cent in the period.
The report says asking rents for all properties have also witnessed a fall by two per cent in the second quarter with detached houses recording the biggest quarterly drop at four per cent.
The dip in prices has, however, not affected land prices which have remained rather flat.
“I don’t think the idea of elections can cause a slide in land prices because it’s a very strong asset class, but we have seen that the increase is a bit lower than what we normally see.”
Asking prices in 18 Nairobi suburbs increased by 0.7 per cent in the quarter while 14 satellite towns recorded a one per cent increase.
The study revealed that land owners in old exclusive suburbs like Karen and Muthaiga are now putting up their land for sale, a phenomenon unseen previously.
“When you see older exclusive suburbs putting up land for sale for us it’s an interesting thing to see because this land has been held on to for a long time. It was very hard to find land being sold in Muthaiga and Karen and areas like those.”
She linked the trend to price stability in the affluent suburbs and a liquidity crunch, which has seen land owners move to liquidate their assets.