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CBK rate cuts spark real estate

back to life

  • Developers and sellers pushed up asking prices in Q3.
  • Early in the quarter, buying activity had dropped to 2-year lows.
  • September marked a sharp rise in enquiries, viewings and completions.
  • Town house sales, where asking prices rose by 1.2 per cent in the quarter, performed better in September.
  • But so did stand alone houses, where prices rose by 3.4 per cent.
  • However, apartment prices recorded the sharpest rise, at 3.6 per cent.
  • Asking rents also rose sharply, by 4.2 per cent for apartments.
  • Activity in the rentals market also dipped, with fewer viewings and closures, but the drop was more marginal.
  • The rentals market appeared to have been able to sustain the rent rises rolled out in the three months.

 

Index Highlights

With all eyes on tumbling mortgage rates in the third quarter, property asking prices jumped in the last three months on
hopes of renewed activity, reported HassConsult, as it unveiled its third quarter property indices and drew on new
“activity” indicators based on levels of real estate enquiries, viewings and completions.
In a further expansion of the consultancy's real estate data collection offering new insights into market reactions and
uptake, Hass reported that the rental market largely absorbed the price increases of the third quarter, while properties
for sale recovered from their lowest levels in two years driven by a renewed uptake of standalone houses during
September.
Overall, sales asking prices rose by 5.1 per cent, with the sharpest rise in apartments, up 3.6 per cent on the previous
quarter, followed by stand alone houses, up by 3.4 per cent. Price rises were more moderate for town houses, with sales
picking up sharply in September.
“We believe it is a correct analysis that as mortgages become more affordable and available, pent-up demand for
property buying will bring higher levels of sales activity. However, with property so fully priced in this market, sellers
seeking higher returns ahead of that surge in demand deterred some buyers in July and August rather than securing
greater revenues,” said Ms Sakina Hassanali, Head of Marketing and Research at HassConsult.
"September, however, saw a renewed appetite for buying, and comfort with the new price levels, offering relief for
developers, many of whom were becoming seriously stretched. The return to more normal levels of buying has come as a
return to life for the sector."
Meanwhile, in the rentals market, the overall rise in asking rents was 4.5 per cent in the third quarter, with the steepest
rise in apartment rents, up 4.2 per cent, followed by standalone houses, up 3.6 per cent. Town house asking rents also
rose 2.8 per cent over the previous three months.
With much of this re-pricing absorbed into the market, the returns for landlords recovered significantly across the
quarter, to a combined 13.81 per cent, across both rental yields and house price appreciation.
“The swelling in demand for rentals as those who would have been first-time buyers have stayed in the rental pool, even
as new entrants arrive, is fueling some continuing rent rises, although we do see signs of some slowing in viewing and
completions,” said Ms Hassanali.
“This rental correction was overdue for many landlords, after some years of stagnating rents, and is now closing the gap in
returns for mortgage-financed landlords that appeared after the mortgage rate rises.”


For more information, please contact:
Sakina Hassanali - Head of Marketing & Research
HassConsult Ltd
ABC Place, Westlands
Tel: +254 020 4446914

 

 

SNAP SHOTS:

  • Stand Alone houses include houses, bungalows, cottages and villas either on their own plot or in a gated community.
  • Property values for stand alone houses have increased by 3.83 times since 2001, a 3.4% rise in the last quarter and a 7.3% rise in the last year. The average price for a stand alone house is currently 33.7 million up from 8.8 million in December 2000.

 

SNAP SHOTS:

  • Town houses include townhouses and maisonettes that are semi-detached or terraced.
  • Property values for town houses have increased by 2.95 times since 2001, a 1.2% rise in the last quarter and a 7.2% rise in the last year. The average price for a town house is currently 19.3 million up from 6.5 million in December 2000.

 

SNAP SHOTS:

  • Apartments include apartments, duplexes and triplexes.
  • Property values for apartments have increased by 2.33 times since 2001, a 3.6% rise in the last quarter and an 6.0% rise in the last year. The average price for an apartment is currently 12.1 million up from 5.2 million in December 2000.

 

SNAP SHOTS:

  • Stand Alone houses include houses, bungalows, cottages and villas either on their own plot or in a gated community.
  • Rental values for stand alone houses have increased by 2.85 times since 2001, a 3.6% rise in the last quarter and a 12.8 rise in the last year. The average rental for a stand alone house is currently Kshs. 162,082 up from Kshs. 56,959 in December 2000.

SNAP SHOTS:

  • Town houses include townhouses and maisonettes that are semi-detached or terraced.
  • Rental values for town houses have increased by 2.39 times since 2001, a 2.8% rise in the last quarter and a 9.1% rise in the last year. The average rental for a town house is currently Kshs. 102,048 up from Kshs. 42,688 in December 2000.

SNAP SHOTS:

  • Apartments include apartments, duplexes and triplexes.
  • Rental values for apartments have increased by 2.88 times since 2001, 4.2% rise in the last quarter and aa 15.0% rise in the last year. The average rent for an apartment is currently Kshs. 66,987 up from Kshs. 21,638 in December 2000.
 

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Did you know

Housing market activity rebounds on CBK rate cuts

back to life

  • Rent price rises in quarter four 2012 far greater than sales price rises
  • Asking rents rose by 4.1 per cent in the final quarter of 2012, over the previous quarter, with steepest rises at top of the market for standalone properties
  • Asking sales prices rose by 1.7 per cent, much more slowly than in the third quarter of 2012
  • Both renting and sales activity rose sharply, however, after a profound drop in the middle of last year, with viewings by purchasers rising to levels approaching the first half of 2011, before the interest rate hikes

 

Annual Index Highlights:

HassConsult today unveiled the Hass Property Index results for the final quarter of 2012, showing a sharp upswing in viewing and enquiries, but still relatively flat sales pricing - although rental prices continued to rise steeply across all segments of the market.

“The sensitivity of buyers to interest rates, even in a largely unmortgaged market, has shown up very sharply in sales activity and pricing in the last 18 months,” said Sakina Hassanali, Head of Research and Marketing at HassConsult. “With rates slashed, enquiries returned to much the same levels of early 2011.”

However, sales prices are taking somewhat longer to gain momentum. Pushes for higher sales prices in quarter three achieved little real gains, seeing asking prices remain largely static in the final quarter.

But asking prices for rentals continued to climb strongly. With asking rents rising by an overall 4.1 per cent, the biggest rises came at the top of the market, where rents for standalone properties rose by 5.2 per cent on the previous three months, making for a 17. 2 per cent increase from January to December 2012.

“The upwards correction in rents, as buyers have held off for better financing terms, has been particularly strong after the relatively flat rentals market in the preceding two years, and may yet take some months to level out,” said Ms Hassanali.

Even the previously stagnant apartment rental market recorded further rises in asking prices, up 2.1 per cent on quarter 3 and 15 per cent on the final quarter of 2012.

“Overall, the picture is of a market returning to buoyancy,” she said.

“Rental yields are now stronger, following the year of rental rises, and financing is moving into a steadily more affordable range. This combination augurs well for a strong year in real estate in 2013, based on financial fundamentals and despite all the uncertainty that comes with an election year.”


For more information, please contact:
Sakina Hassanali - Head of Marketing & Research
HassConsult Ltd
ABC Place, Westlands
Tel: +254 020 4446914

 

 

SNAP SHOTS:

  • Stand Alone houses include houses, bungalows, cottages and villas either on their own plot or in a gated community.
  • Property values for stand alone houses have increased by 3.92 times since 2001, a 2.3% rise in the last quarter and a 11.7% rise in the last year. The average price for a stand alone house is currently 34.5 million up from 8.8 million in December 2000.

 

SNAP SHOTS:

  • Town houses include townhouses and maisonettes that are semi-detached or terraced.
  • Property values for town houses have increased by 2.95 times since 2001, a 0.1% rise in the last quarter and a 6.4% rise in the last year. The average price for a town house is currently 19.3 million up from 6.5 million in December 2000.

 

SNAP SHOTS:

  • Apartments include apartments, duplexes and triplexes.
  • Property values for apartments have increased by 2.35 times since 2001, a 1.1% rise in the last quarter and an 5.7% rise in the last year. The average price for an apartment is currently 12.2 million up from 5.2 million in December 2000.

 

SNAP SHOTS:

  • Stand Alone houses include houses, bungalows, cottages and villas either on their own plot or in a gated community.
  • Rental values for stand alone houses have increased by 2.99 times since 2001, a 5.2% rise in the last quarter and a 17.2%% rise in the last year. The average rental for a stand alone house is currently Kshs. 170,469 up from Kshs. 56,959 in December 2000.

SNAP SHOTS:

  • Town houses include townhouses and maisonettes that are semi-detached or terraced.
  • Rental values for town houses have increased by 2.48 times since 2001, a 4.0% rise in the last quarter and a 13.9% rise in the last year. The average rental for a town house is currently Kshs. 106,122 up from Kshs. 42,688 in December 2000.

SNAP SHOTS:

  • Apartments include apartments, duplexes and triplexes.
  • Rental values for apartments have increased by 2.94 times since 2001, 2.1% rise in the last quarter and a 15.0% rise in the last year. The average rent for an apartment is currently Kshs. 68,383 up from Kshs. 21,638 in December 2000.
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