declining markets

The slowdown in property markets over the past 12 months has led to a decline in stock prices on the back of a stumbling economy.

Cement manufacturers, paint manufactures and small businesses have been at the receiving end of the prevailing negative market sentiments during the period.

Due to the extensive nature of the real estate value chain and the number of parties involved from project conception to construction, to sale or letting and management, the ripple effect has touched on a wide range of manufacturing, supplies and service industries.

Construction material manufacturers, machinery and transportation providers, financial services, construction industry professionals, real estate and legal services are some of the sectors that have been touched by the situation.

Commenting on the decline of construction industry-related stocks, AIB capital analysts told Business Daily that the decline in the share prices is a reflection of the decline in production and consumption in the cement sector since 2017. Demand for cement has reduced as activity in the real estate sector has declined.

A survey on landlord-tenant activity in the market has shown that landlords are going to extremes to attract as well as retain existing tenants.

Strategies deployed by landlords include lowering going rents and agreeing more flexible, payment terms with tenants. The survey by CK revealed that landlords in places like Muthiga and Regen are no longer asking for deposits while in many places, landlords have lowered rents by up to 20 percent.

“I live in Kasarani and trust me, guys are moving out every month without fail. The (new tenants) are given lower rates than what we pay. Besides, tenants are being allowed to pay twice a month,” Alexander Ngaira, a city dweller on Twitter.

The current market trends are a continuation of the market’s reaction to oversupply in markets since 2018. Here is a comparison from February 2019.

Read; Buyers hold sway over sellers in Nairobi’s prime property markets

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