The latest Kenya Bankers Association House Price Index shows that Kenya’s housing market remained largely stable in the third quarter of 2018, even though the pace of price growth slowed from the previous quarter.
The KBA-HPI said house prices rose by 1.35 percent in the period, down from the 1.76 percent increase recorded in the second quarter. The index linked the stability to price changes staying below one percent in many cases and to market conditions that continued to be shaped more by demand than supply.
While prices did not swing sharply, the report said the easing growth trend across the first three quarters of 2018 pointed to a reversal of the rise seen between the fourth quarter of 2017 and the first quarter of 2018.
The index also said future pricing could be affected by supply-side shifts once projects under the government’s affordable housing programme in the Big Four agenda begin to take shape. It added that developers and financiers may also adjust their risk appetite as the market responds to those changes.
KBA Research and Policy Director Jared Osoro said the market was still showing weak demand despite the increase in prices. “Despite the price increase, the situation in the market reflects subdued demand on the back of continued investments in the housing market which remained skewed towards the middle and high-income bracket, ‘’ said KBA Research and Policy Director Mr. Jared Osoro.
Buyer preferences also shifted in the quarter. Bungalows accounted for 38 percent of demand, apartments 35 percent and maisonettes 27 percent, ending the run in which apartments had led for the previous four quarters. The report said maisonettes and bungalows were concentrated in the high-income bracket, while apartments were spread more evenly across the upper, middle and lower ends of the market.
According to the index, the main price drivers did not change in the third quarter of 2018, which suggested that homeowner preferences remained consistent. The size of a house, measured by plinth area, was no longer significant, unlike in earlier quarters.
Even so, features such as the number of bathrooms, a backyard and a master ensuite continued to influence prices, although overall demand for homes on the market remained low.
