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Hass Property Index Q4 2013 PDF Print option in slimbox / lytebox? (info) E-mail

Overpriced mortgages push up semi-detached rents

  • Overall, asking prices for residential property sales fell in the fourth quarter of last year
  • Asking prices fell by an average 1.3 per cent for detached houses and apartments
  • But asking prices for semi-detached houses continued to rise, albeit by a marginal 0.6 per cent
  • However, the rate of rent increases accelerated from October to December
  • Asking rents for apartments, which had fallen during 2013, rose by 4.2 per cent in the final quarter
  • Semi-detached rents also continued their sharp rise, up a further 4.5 per cent on the previous quarter,
  • and 19.4 per cent on a year earlier
  • Asking rents for detached houses continued to rise at a more subdued rate of 1.9 per cent in the fourth quarter
  • The now prolonged period of property sales prices, with the mortgage market stalled, is also now having a negative
  • impact on property investment returns


Index Highlights
index
index

 

HassConsult today announced the results of the Hass Residential Price Index for the fourth quarter of 2013, revealing

accelerating rent rises in the final months of last year, driven by significant over-demand for rentals.

“For the country's expanding middle classes, the path of progressing from renting to purchasing is being blocked, now

for a third yearrunning, by the nation's exceptionally high mortgage rates,” said Ms Sakina Hassanali, Head of Research

and Marketing at HassConsult.

“Typical first-time buyers of apartments and low-end town houses are continuing to find mortgages unaffordable, creating

a demand bulge in rentals.”

This clustering saw semi-detached rents moving sharply upwards all year, rising by 4.5 per cent in the fourth quarter on

third quarter levels, and by 19.4 per cent on a year earlier.

The final quarter also saw a renewed take-off in asking rentals for apartments, up by 4.2 per cent on the previous quarter,

taking the rise for the year to 2.2 per cent, as the sudden rises more than offset earlier falls in asking rents.

In property sales, however, only the asking prices of town houses rose from October to December, up by 0.6 per cent on

the previous three months,while the asking prices for detached houses and apartments fell by 1.3 per cent.

'At a profound level, the failure of the mortgage market to provide a new route to home ownership is now shaping the

Kenyan property market in a way that cannot be sustainable,” said Ms Hassanali.

“Demand is bulging in rental properties, even as developers are being deterred from new construction by flat sales prices

and rising costs. The sum is ever higher rents, in a population made up of landlords and tenants.”


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

 

 

 

SNAP SHOTS:

The Hass Composite sales Index is representative of
all property for sale in Kenya.

Property values have increased by 3.37 times since
2000.

The index shows a property price fall of 1.0% in
the last quarter and a 0.3% rise in the last year

 

sales

 

 

SNAP SHOTS:

The annual average is representative of the average
price of all properties offered for sale in Kenya

The average value for a property has gone from 7.1
million in December 2000 to 24.2 million in
December 2013

The average value for a 4-6 bedroom property is
currently 33.8 million

The average value for a 1-3 bedroom property is
currently 11.4 million

 

sales

 

SNAP SHOTS:

  • The Mix by Year is a measure of the percentage that
    each type of property represents in the market.
  • In 2001, apartments took up 23.5% of the market, semi-detached took up 24.5% of the market and detached houses took up 52% of the market.
  • In 2013 however, apartments took up 41.7% of the market, semi-detached houses took up 24% of the market and detached houses took up 34.3% of the market.

 

SNAP SHOTS:

• Detached houses include stand alone houses, bungalows, cottages and villas either on their own plot or in a gated community
• Property values for detached houses have increased by 3.94 times since 2001, a 1.3% fall in the last quarter and a 0.5% rise in the last year. The average price for a detached house is currently 34.7 million up from 8.8 million in December 2000.

sales

SNAP SHOTS:

• Semi-detached houses include townhouses and maisonettes that are semi-detached or terraced.
• Property values for semi-detached houses have increased by 2.96 times since 2001, a 0.6% rise in the last quarter and a 0.1% rise in the last year. Average price for a semi-detached house is currently 19.4 million up from 6.5 million in December 2000.

sales

SNAP SHOTS:

• Apartments include apartments, duplexes and triplexes.
• Property values for apartments have increased by 2.35 times since 2001, a 1.3% fall in the last quarter and a 0.2% fall in the last year. The average price for an apartment is currently 12.2 million up from 5.2 million in December 2000.

sales

 

sales

 

SNAP SHOTS:

The Hass Composite Letting Index is representative
of all property for rental in Kenya

Rents have increased by 3.13 times since 2001

The index shows rents have risen by 3.0% in the last quarter but have risen by 8.5% in the last year.

 

 

sales

 

SNAP SHOTS:

The annual average is representative of the average
rent of all properties offered to let in Kenya.

The average rental for a property has gone from
Kshs. 38,516 in December 2000 to Kshs. 120,372 in
December 2013.

The average rent for a 4-6 bedroom property is
currently Kshs. 183,899

The average rent for a 1-3 bedroom property is
currently Kshs. 67,651

 

sales


SNAP SHOTS:

The Mix by Year is a measure of the percentage that each type of property represents in the market.

In 2001, apartments took up 45.3% of the market,
semi-detached took up 20.5% of the market and
detached houses took up 34.1% of the market

In 2013 however, apartments took up 54.3% of the
market, semi-detached took up 20% of the market
and detached houses took up 25.7% of the
market.

 

 

SNAP SHOTS:

• Detached houses include stand alone houses, bungalows, cottages and villas either on their own plot or in a gated community.
• Rental values for detached houses have increased by 3.25 times since 2001, a 1.9% rise in the last quarter and a 8.5% rise in the last year. The average rental for a detached house is currently Kshs. 185,029 up from Kshs. 56,959 in December 2000.

sales


SNAP SHOTS:

• Semi-Detached houses include townhouses and maisonettes that are semi-detached or terraced.
• Rentals for semi-detached houses have increased by 2.97 times since 2001, a 4.7% rise in the last quarter and a 19.4% rise in the last year. The average rental for a semi-detached house is currently Kshs. 126,724 up from Kshs. 42,688 in December 2000.

sales

SNAP SHOTS:

• Apartments include apartments, duplexes and triplexes.
• Rental values for apartments have increased by 3.01 times since 2001, 4.2% rise in the last quarter and a 2.2% rise in the last year. The average rent for an apartment is currently Kshs. 69,858 up from Kshs. 21,638 in December 2000.

sales
Last Updated on Thursday, 23 January 2014 13:49
 

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Did you know

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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