House prices recorded an overall decline in most markets last year according to property firm HassConsult.
Property markets in most of Nairobi’s satellite towns were bearish. The firm’s house price index shows that house prices declined by 0.5 percent for the first time in 12-years while rents declined by 2.1 percent during the same period.
The gloomy market outcome in the past year has been attributed to a shaky economy where economic fundamentals have pushed back on the purchasing power and of the middle class, the prime target for most developers.
“When there is an economic slowdown the first people that get hit are the middle class. Satellite towns where the middle-class reside have therefore seen an immediate shift,” said Hass Consult Head of Research Sakina Hassanali
Property investors in Juja were hit the hardest by falling prices in the past 11 months following prices slips of up to a 9.6 percent, more than 6 percent below average, while landlords in Kiserian saw the greatest decline in rental prices (7.8 percent).
Ridgeways had the highest return on home sales while Kitisuru topped the suburbs with the highest return on land.
However, Kenyans’ insatiable demand for land continued to prop up land prices with some locations recording price growth of as high as 10 percent for the year (Kitengela). In general, land prices in satellite towns grew by 6.93 percent while land in Nairobi suburbs appreciated by just 1.69 percent.
Speaking on the outlook for 2020, Hasanali said, “I’m hoping 2019 is the worst of it. From what I’ve seen in January we are quite positive about 2020. We would expect to see more growth from more money in the market to create a sector upturn.”