Most home buyers sought lower-segment houses in the year 2023 even as real estate developers grappled with a sustained overall decline in housing prices for most part of the year.
According to the latest Kenya Bankers Association (KBA) Housing Price Index (KBA-HPI), there was a marked demand uptick within the low-market segment in the last quarter of the year 2023, accounting for 62.3% compared to 48% recorded in the previous quarter.
The trend followed an overall sustained negative pace of house prices growth in the first three quarters of the year despite recording a modest 1.53% decline in the last quarter, driven by a slight strengthening of demand towards the end of the year.
The Index, which tracks housing price movements from the last quarter of the year 2021, shows a persistent and uneven negative-territory home prices growth trajectory, in a trend that the KBA-HPI associates with corresponding fluctuating activity in the construction sector.
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“A fluctuating trend was evident in the construction sector; starting with a slight increase in the first quarter( 3.06%), followed by a decrease in the second quarter (2.55%) and a subsequent rise in the third quarter of 2023 (3.8%),’’ reads the Index, whose base evaluation rate was set in the year 2013.
Further analysis of completed transactions shows a significant drop, particularly in the mid-market segments to account for 21% from 37% in quarter three of the year. In addition, there was a slight activity increase in the high-market section, to account for 17% in quarter four from 15.2% in the third quarter.
During the period under review, preference for apartments remained dominant despite recording a 14% quarter-on-quarter decline between the last two quarters of the year. The demand for bungalows remained steady, accounting for 30% of the market share, with preference for maisonnetes growing notably to 29.91% from 15.2% in the third quarter.
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