Prices for houses recorded a significant increase, recording double digits for the first in the annual growth rate since 2011. A report by HassConsult affirmed that the housing market recorded a 14.6 per cent increase over the past one year.
During the first quarter of 2016, asking prices for houses increased by 4.2 per cent.
The double digit growth is significant, because it comes against a backdrop of economic uncertainty and market volatility. It is an indication that investors are looking for more consistent asset channels and are looking to the stability of the property market.
Ms. Sakina Hassanali, Head of Research and Marketing at HassConsult said
There has been increased demand for residential property since the beginning of the year, catalysed by the poor performance of alternative asset classes such as stocks. Investors are also shying away from assets such as fixed deposits in light of the perceived turmoil in the financial sector.
The report further says that asking rents in Nairobi rebounded by a marginal 1.5 per cent in the first quarter attributable to growth in suburbs that are characterized by detached and semi-detached houses such as Loresho and Lavington up 3.4 per cent and 2.9 per cent respectively. Semi-detached houses across the market recorded sharp rent rises of 1.3 per cent over the last quarter and 17.1 per cent over the last year.
Sakina added that the increased supply of apartments continues to suppress rents in areas dominated by them with Westlands reporting a 2.5 per cent drop in rental asking prices. The same trend was observed in satellite towns with apartment heavy suburbs recording some correction in rental prices. Syokimau, for example, witnessed a 2.3 per cent drop in asking rents between January and March 2016.