Fall in house pricing in Kenya has stimulated a spike in demand
In the year 2023, most home buyers showed a preference for lower-priced houses, even as real estate developers faced a continued decline in housing prices throughout much of the year.
According to the latest Kenya Bankers Association (KBA) Housing Price Index (KBA-HPI), there was a significant increase in demand for houses in the low-market segment during the last quarter of 2023, accounting for 62.3% compared to 48% in the previous quarter.
This trend followed a sustained decrease in house prices during the first three quarters of the year, with a modest 1.53% decline recorded in the last quarter. The decrease was attributed to a slight increase in demand towards the end of the year.
The Index, which monitors housing price fluctuations since the last quarter of 2021, reveals a consistent and uneven decline in home prices, a trend attributed by the KBA-HPI to fluctuating activity in the construction sector.
“A fluctuating trend was evident in the construction sector; starting with a slight increase in the first quarter( 3.06%), followed by a decrease in the second quarter (2.55%) and a subsequent rise in the third quarter of 2023 (3.8%),’’ reads the Index, whose base evaluation rate was set in the year 2013.
Further analysis of completed transactions reveals a significant decrease, particularly in the mid-market segment, accounting for 21% compared to 37% in the third quarter of the year. Additionally, there was a slight increase in activity in the high-end market segment, rising to 17% in the fourth quarter from 15.2% in the third quarter.
During the review period, the preference for apartments remained dominant, despite a 14% quarter-on-quarter decline between the last two quarters of the year. Demand for bungalows remained steady, capturing 30% of the market share, while the preference for maisonettes notably increased to 29.91% from 15.2% in the third quarter.
