Apartments maintained dominance in the housing market accounting for 62.6% of the total units sold between January and March 2019 down from 76.3% of the total units sold between October and December 2018, the Kenya Bankers Association House Pricing Index (KBA-HPI) shows.
This represents a 13.7% decline from Q4, 2018.
According to KBA-HPI, this was a pointer to subdued market activity.
The share of maisonettes was up by 11.8% from 11.6% in the fourth quarter of 2018 to 23.4% in the first quarter of 2019.
On the other hand, the share of bungalows marginally rose by 1.9% to account for 14.0% of the house units sold in the market.
KBA-HPI shows that growth in house prices declined by 2.78% between January and March 2019.
This is the third time the index has reported a decline in the growth of house prices, the last such instances having been registered during the last quarter of 2013 and the third quarter of 2014 respectively.
According to KBA, the decline was attributable to a number of factors including the slow growth of credit to the building and construction sector between July 2017 and June 2018 and reduced consumption of cement during the period under review on the supply side.
Tough economic times and lack of access to credit to prospective buyers were the biggest inhibitors to growth in house prices from the demand side.
KBA-HP for Q1 2019 states that the rate of growth of credit to the building and construction sector during the period July 2017 to June 2018 was modest at best averaging 1.2%.
Conversely, cement consumption during the period July 2017 to November 2018 was on a general declining trend.
“Underlying this consumption trend was a decline in cement production from 553,631 metric tonnes in July 2017 to 460,967 metric tonnes in November 2018,” reads the report.
The price decline during the first quarter of 2019 while indicating the sustenance of a general trend observed since the second quarter of 2018 is seen as tentative, and could be a pointer to a depressed market if sustained.
The last decline was followed by a reversal in the form of growth in house prices in the subsequent quarter.