NAIROBI, Kenya
The property market has slowed down in line with a general drop in economic growth, according to the HassConsult property price index for the third quarter of 2013. Head of marketing and research at HassConsult Sakina Hassanali said hopes that renewed investor confidence would spark an upturn in economic activity from the second half of the year have been dampened by several factors, including the aggressive collection of public sector revenues.
She noted, however, that subdued economic growth has not yet dented property prices, which continue to record some increases. The most significant drop in asking prices was for detached properties, which fell by 2.3 per cent from July to September, compared with three months earlier.
The top end of the market was the also affected, as buyers continued to experience financial pressures. Unmortgaged purchasing also slowed down. Semi-detached houses fared somewhat better, with asking prices up by 0.8 per cent. Sales in this segment were supported by a resumed, albeit marginal, flow of mortgages, and purchasing by cash buyers unable to reach standalone prices.
The supply of semi-detached houses was also tighter than in other segments as this section of the market was most affected by the slowdown in building last year following a jump in interest rates. In the apartment market, the signs of financial pressure came in both apartments’ buying and renting, as prices dropped by 0.8 per cent, and asking rents by1.3 per cent.
Meanwhile, the Mortgage Company unveiled The Mortgage Report for the third quarter of 2013 with a call for urgent action to increase the accessibility and eligibility for home loans in a market that remains far behind other global and regional property markets in financing.
The surge in mortgage interest that followed on the CBK rate rises of 2011 has led to a widening in interest rate spreads by commercial banks, which has yet to be corrected. The best rate on offer in the third quarter remained 13.5 per cent from CFC Stanbic Bank, underpinned by the Central Bank of Kenya rate at 9 per cent.
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