Marginal 0.2 Percent House Price Increase Witnessed In Second Quarter
Nairobi, July 27th, 2015 - Average house prices in Kenya increased by 0.2 per cent during the second quarter of 2015 compared to the previous quarter's 2.75 per cent increase. According to the Kenya Bankers Association Housing Price Index (KBA-HPI), the softening signals stabilisation of overall house prices in line with the demand-supply dynamics that were influenced by the effects of a slowdown of economic growth and emerging macroeconomic instability.
Consistent with the previous quarter, the size of the unit was especially a key price driver; this can be inferred from the demand that was influenced by a significant extent by the number of bedrooms and bathrooms, and if a backyard and domestic staff quarters was present. Other factors that influenced the price movements include the size of the land the house was sitting on, amenability of the house to re-development, and social amenities in the neighbourhood. According to KBA Director of Research and Policy, Jared Osoro, the house price movements reveal the linkages between bungalows and apartments. "We have found that especially in the high end of the market which we have clustered into Regions 2 and 3 that demand for bungalows hinges on the desire to redevelop the property into apartments," said Mr. Osoro. The KBA-HPI regions are based on clustered price ranges across several counties. He added that houses situated in the high end localities of the greater Nairobi area, Milimani (Kisumu), and Milimani (Nakuru) witnessed faster price movements on a quarterly basis. To better guide policymakers and investors on the trends in the housing sector, the banking industry's umbrella body Kenya Bankers Association (KBA) launched the KBA-HPI in February 2015. The Index has quickly been recognised as a credible analytical tool that is useful for tracking housing sector dynamics and price movements. "We are very pleased with the increased interest the KBA-HPI has received from not only the financial services players but also the sector regulators, which have begun to utilise the KBA tool to inform policy," said KBA Chief Executive Officer, Habil Olaka. Published on a quarterly basis by KBA's research center, the KBA-HPI analyses industry's housing data based on locational, qualitative and quantitative characteristics that influence pricing.