This archive report was first published on 26 November 2019.
Kenya's housing market has been experiencing a decline in demand, with house prices falling by 2.28% in the three months before September, according to the Kenya Bankers Housing Price Index.
This decline is attributed to tight credit conditions, which have limited the resources available to households seeking to own houses. Additionally, limited disposable income has hindered homeownership, leading to a decrease in demand for houses.
Despite the overall output growth in the economy, Kenya has experienced a declining demand for houses, with many preferring to travel long distances in search of cheaper rental units.
As a result, developers are constructing fewer new units and selling existing units at lower prices. The declining price trend is a reverse of the positive price growth seen since 2014.
According to KBA Research and Policy Director Mr. Jared Osoro, the declining demand for housing is due to a disconnect between the overall output growth in the economy and effective demand by potential homeowners. He also noted that tight credit conditions have adversely influenced households' ability to access resources toward homeownership, and that households' disposable incomes remain constrained.
