NAIROBI – Kenya's property sector recovered in the fourth quarter of 2018 due to strong economic growth, experts said on Thursday.
Sakina Hassanali, head of development, consulting and research at real estate firm Hass Consult, told journalists in Nairobi that the economic slowdown of the last two years has played out across the real estate industry, slowing activity, and uptake and leading in some few places, such as apartment rentals, to actual price falls.
"However, after some early signs of recovery from the middle of last year, the industry experienced a marked and general recovery in the fourth quarter which resulted in working class and middle-class Kenyans beginning to experience some improvement in their disposable incomes," Hassanali said.
She noted that there was an industry-wide recovery in the final months of 2018, with rents rising, sales prices rising, and industry activity picking up generally, after the market declines of 2017 and early 2018.
"The strongest recovery came in apartment rental prices, which have suffered almost a decade of lackluster growth, driven by intensive building throughout Nairobi and its suburbs," Hassanali said.
She added that the somewhat slower pace of apartment building in the last two years has finally seen demand catching up with the available space, lifting occupancy and driving apartment rents upwards sharply by November and December 2018. She observed that overall, apartment rental prices rose by 15.9 percent, which was the most marked rise since mid-2009.
"As the leading asset class within real estate for private landlords, apartments have been among the most volatile for pricing, but the falls in apartment rental prices throughout 2017 gave way to stabilizing prices from January 2018, and a surge in rents by the final quarter of the year," she revealed. According to Hass Consult, the weakest recovery was in the segment of the property market dominated by international renters and thus affected by the ongoing global slowdown.