Empowering African Businesses

Kenya: Housing market falters on banks’ hesitancy to service mortgages

0 29

- Advertisement -

The housing market in Nairobi and satellite towns cooled in December last year as banks’ reluctance to service mortgages continued to weigh on the market, according to the latest survey.

House price index report for Q4, 2016 by HassConsult said that the market ‘shattered’ at the end of 2016 and had gotten off to a slow start in 2017 – this despite the anticipated low interest regime after the passing of Banking Amendment Act 2016 into law.

“In the last quarter the market was optimistic and the interest rate cap would result in advancing more affordable credit which was expected to increase loan uptake and spur the property market. Unfortunately this has not been the case as commercial banks are more cautious in lending which continues to hamper the market’s growth,” said Ms. Sakina Hassanali, Head of Research and Marketing at HassConsult.

Asking property prices for satellite towns rose by just 1.5 per cent in the fourth quarter of 2016 and 8.6 per cent return over the year, while rental prices grew by 0.2 per cent over the period and four per cent during the entire year.

Property prices in Nairobi suburbs increased by 0.1 per cent in the fourth quarter and posted a 7.6 per cent return over the year.

“Also affected by the macroeconomic environment in 2016 were Nairobi’s high density suburbs due to price correction of recently oversupplied large apartments.

- Advertisement -

Both sale and rental prices in satellite towns last year have witnessed the lowest annual increase since 2008 attributable to the economic downturn that saw a cooling down of transaction numbers,” said Ms. Hassanali.

The survey further showed a similar trend in land prices which recorded a 0.8 per cent growth for the quarter and 5.1 per cent rise for the year, while satellite towns performed better with land prices rising by an average of 2.3 per cent during the period.

Land prices in Gigiri, Donholm and Juja performed better than those in Mlolongo, Nyari and Eastleigh which were ranked worst performers during the period under review.

1,330 total views, 0 views today

- Advertisement -

Comments
Loading...

Subscribe to our latest updates

Signup for our newsletter and get notified when we publish new articles for free!




Social Media Auto Publish Powered By : XYZScripts.com