House prices within the last three months have remained constant, according to a survey that was released recently by the Kenya Bankers Association (KBA). The Housing Price Index form KBA indicates that there was only an increase of 0.2 per cent in house prices from April to late July, 2015.This is a negligible increase compared to the 2.75 per cent growth observed in the period between December, 2014 and March 2015, and the 2.18 per cent in August to December 2014.
The survey, which pooled real estate in the country into three groups, or regions — low, middle and upper income — also revealed a difference in purchasing in the different classes of Kenyans.
Region One included Nyeri, Syokimau, Mlolongo, Kilifi , Kasarani, Roysambu and Ruaraka along Thika Road.Region Two included Uthiru, Kinoo, Kikuyu, Kabete, Buru Buru and Ngong Road; while Region Three covered Kileleshwa, Kilimani, the Milimani area of Kisumu, Nakuru, Muthaiga, Runda, Karen, Riverside and Kitisuru.
Prices in Region Two and Three, mostly occupied by the middle and upper classes, seemed to be perpetually on the rise compared to Region One, which comprised of towns that have experienced increased construction but are mainly for renting.
This could be attributed to the fact that the market is inclined to serve the interests if region Two and Three as the average price is between Sh10 million to Sh19 million, and above Sh25 million, respectively. While the demand for housing is observed in all regions, Two and Three attracts buyers while those in Region One attracts renters.
KBA says the soft price change should be interpreted positively as it would indicate stability in the real estate market. The survey also indicates that apartments are more preferred than bungalows and maisonettes in all regions as they “are relatively the more affordable of the three housing types”. The investors in Region Two and Three also bought bungalows, tore them down and redeveloped them for apartments.
The other factors that influenced the price change include increasingly discerning buyers who place a premium on privacy and security, a key component of gated communities.Most people also sought gated communities because they also were looking for “scenic value”, which would guarantee uniformity in the manner in which houses were constructed.
Other factors that were considered included the size of the house — judged by the surface area on which the houses constructed, number of bedrooms, and whether the house has a backyard and a domestic servants quarters — and location of the house — which would also included proximity to social amenities such as a dispensary, a mall and a children’s nursery.
Source : Daily Nation