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Hass Index Report Quarter 2 2014 PDF Print option in slimbox / lytebox? (info) E-mail

Mid-market property surges on rising rent yields

• House price rises were more subdued in Q2 , held down by a dip in asking prices for top-of-the-market detached houses
• Detached house prices fell by 0.3 per cent on Q1, and 2.1 per cent on a year earlier, in a price correction following from
the more than 10 per cent post-election surge in detached house prices
• Strongest price growth continued to be for semi-detached houses, up 3.3 per cent in Q2, and 6.7 per cent on year earlier
• Apartments also consolidated price gains of 2014, with a further 1.3 per cent rise in asking prices in the second quarter
• However, rental prices continued to rise far more rapidly than sales prices, up an overall 2.7 per cent on Q1.
• Rents rose more strongly for semi-detached houses, up 3.2 per cent, and apartments, also up 3.2 per cent
Demand for both buying and renting was concentrated in the mid market, in semi-detached houses and apartments
• This reflected the stronger performance in rental yields in the mid market, with semi-detached houses historically, and
currently, recording the strongest rental yields, at 7.77 per cent in Q2

Index Highlights:

*The Hass Composite Sales Index is a measure of asking sales prices, based on Mix Adjusted Methodology

*The Hass Composite Lettings Index is a measure of asking sales prices, based on Mix Adjusted Methodology

Hass Consult today unveiled the Hass property price indices for the second quarter, revealing rising price strength in the

mid-market,driven by the recovery in rental yields as a result of the two year trend of rent rises ahead of sales price growth.
The rise in property sales prices slowed, overall, in the first quarter - depressed by a 0.3 per cent drop in asking prices for

detached houses - to rise by 0.6 per cent across the property market.This brought house asking prices to the same level

as a year earlier, but the plateau in overall pricing reflected a mixed underlying performance - with a 2.2 per cent fall in

detached house prices over the last 12 months offset by a 6.7 per cent rise in semi-detached house prices and a 1.5 per

cent increase in asking prices for apartments.The ongoing and accelerating strength in the market for semi-detached houses

comes at a time when interest rates are expected to fall following the placement of the government's EuroBond - and the

consequent easing of public demand for domestic debt. With domestic bond returns currently running at 9.18 per cent, and

bond returns predicted to fall, improved rental yields are now gaining their lustre as an investment, spurring forward the

buy-to-rent market.
Historically, semi-detached houses have recorded the best rental yields in the Kenyan property market, peaking at 9.69 per cent

in December 2007, before falling - on swift house price rises - to bottom at 5.95 per cent in August 2011.
However, the marked surge in rental prices in the last two years, up a further 2.7 per cent in the second quarter, has delivered

steady gains in rental yields.
Rents for semi-detached houses rose a further 3.2 per cent in the second quarter of 2014, taking rental yields to 7.77 per cent.
The 3.2 per cent rise in apartment rents in Q2 saw rental yields for apartments recover to 7.47 per cent.
For detached houses, which have traditionally enjoyed yields at least one percentile point lower than semi-detached houses,

rent rises in the second quarter of 2.4 per cent delivered a rental yield by the end of the quarter of 6.55 per cent.
"The correction in the relationship between rents and house prices was a necessary one, following the run-up in property

prices from 2008 to 2011," said Ms Sakina Hassanali, Head of Research and Marketing at Hass Consult. "With the interest rate

environment now expected to shift, the restoration of property rental yields back into the 7 per cent to 8 percent range is once

again attracting new investor interest as a long-term investment."

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 3.46 times since
2000.
• The index shows a property price rise of 0.6% in the
last quarter and a 0.05% rise in the last year.

 

 


SNAP SHOTS:

• 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 24.8 million in June
2014.
• The average value for a 4-6 bedroom property is currently 34.9 million.
• The average value for a 1-3 bedroom property is currently 11.6 million.

 

 

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 June 2014 however, apartments took up
41.7% of the market, semi-detached houses took
up 24.0% of the market and detached houses took up 34.3% of the market.


Breakdown of 10 years data by Year

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 4.00 times since 2001, a 0.3% fall in the last quarter and a 2.1% fall in
the last year. The average price for a Detached House is currently 35.2 million up from 8.8 million in December 2000.



SNAP SHOTS:

• Semi-detached houses include townhouses and maisonettes that are semi-detached or terraced.
• Property values for Semi-detached Houses have increased by 3.11 times since 2001, a 3.3% rise in the last quarter and a 6.7%
rise in the last year. The average price is currently 20.4 million up from 6.5 million in December 2000.


SNAP SHOTS:

• Apartments include apartments, duplexes and triplexes.
• Property values for Apartments have increased by 2.43 times since 2001, a 1.3% rise in the last quarter and a 1.5% rise in the
last year. The average price for an Apartment is currently 12.7 million up from 5.2 million in December 2000.



SNAP SHOTS:
•The Hass Composite Letting Index is representative
of all property for rental in Kenya
• Rents have increased by 3.29 times since 2001
• The index shows rents have risen by 2.7% in the last
quarter but have risen by 9.7% in the last year.

 

 

 

 

 


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. 126,576 in
June 2014.
• The average rent for a 4-6 bedroom property is currently Kshs. 196,041
• The average rent for a 1-3 bedroom property is currently Kshs. 72,030

 

 


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 Houses took up 20.5% of the market
and Detached Houses took up 34.1% of the market.
• In June 2014 however, Apartments took up 54.3% of the market, Semi-detached Houses took up 20.0% 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 3.40 times since 2001, a 2.4% rise in the last quarter and an 8.5% rise in
the last year. The average rental for a Detached House is currently Kshs. 193,780 up from Kshs. 56,959 in December 2000.


SNAP SHOTS:

• Semi-Detached houses include townhouses and maisonettes that are semi-detached or terraced.
• Rental values Semi-detached Houses have increased by 3.15 times since 2001, a 3.2% rise in the last quarter and an 16% rise in
the last year. The average rental is currently Kshs. 134,350 up from Kshs. 42,688 in December 2000.


SNAP SHOTS:

• Apartments include apartments, duplexes and triplexes.
• Rental values for Apartments have increased by 3.17 times since 2001, 3.2% rise in the last quarter and a 8.2% rise in the last
year. The average rent for an Apartment is currently Kshs. 73,652 up from Kshs. 21,638 in December 2000.

 

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Did you know

Rents now rising at ten times the rate of last two years

  • House prices remained resilient, despite the high mortgage rates, with asking prices up 1.3 per cent on previous quarter
  • Closing prices across all houses rose by 0.5 per cent
  • The strongest house price gains came from stand alone houses, where asking prices rose by a significant 2.9 per cent, reversing the price falls of last year
  • Town houses continued to track upwards steadily on asking prices, up 1.1 per cent on March prices, and 6.8 per cent on a year earlier
  • Asking rents are now climbing rapidly, at ten times the rate during 2010 and 2011
  • Asking rents across all properties were almost flat from September 2009 to September 2011, rising just 1.5 per cent over the two years
  • In the nine months since September last year, asking rents across all properties have risen by 7.9 per cent, with 6.6 percent of that increase in the first half of 2012
  • The rental rises have been sharpest for apartments, up 10.33 per cent in the nine months since September last year

Index Highlights:

THE HASS COMPOSITE SALES INDEX YEAR TO Q2
THE HASS COMPOSITE LETTINGS INDEX YEAR TO Q2

HassConsult today announces the results for the second quarter 2012 of its house price and rentals indices, revealing ongoing hikes in rentals against a backdrop of stable house prices. The rise in asking rentals is now running at 10 times the rate during 2010 and 2011, when rents were close to static. From September 2009 to September 2011, the asking prices for rents rose by just 1.5 per cent in total.

However, rising property costs, inflation and - seemingly instrumentally - interest rates, have led to a sharp take-off in rents, now sustained for three successive quarters. Since the end of September last year asking rents across all property types have risen by 7.9 per cent, with 6.6 per cent of that increase falling in the first half of 2012. The sharpest rises are happening in apartment rents, which have risen 10.33 per cent since the climb in rents began at the end of September last year, and 8.1 per cent since the beginning of 2012.

“This surge in rental prices comes as landlords cover higher finance and other costs, and at a time when there is an increased volume of people seeking the same pool of rental properties, as potential homeowners hold off from purchasing,” said Ms Farhana Hassanali-Hashmani, Property Development Manager at HassConsult.

“It is a rise that starkly brings home the immediate impact on all Kenyans of the bottleneck caused in building and buying by pushing finance out of reach for many developers and mortgaged homeowners,” she said. Against this backdrop, Hass welcomed wholeheartedly the first move by the CBK to bring down interest rates, with the cut in the base rate last week from 18 per cent to 16.5 per cent. “The prevailing monetary policy has represented a 'closedown' for home developers in a country where we are severely short of good homes,” said Ms Hassanali-Hashmani.

However, following the decision to cut the frequency of meetings for the Monetary Policy Committee that sets interest rates, to once every two months, HassConsult urged the committee to work as rapidly as possible to bring interest rates down to a more normal and viable level by global standards.
“The hope of attracting foreign funds through top-end rates cannot be ignored, but the impact on ordinary Kenyans of hobbling the real estate industry and creating new rent surges must be considered too in the CBK's efforts to maintain exchange rates at their current levels.”

Also reporting on house prices, HassConsult revealed ongoing stability and even some small gains, with overall closure prices across all types of property rising by 0.5 per cent in the last three months, while asking prices rose by 1.3 per cent. Within this overall figure came some first signs of substantial price growth in standalone houses, where asking prices have risen by 2.7 per cent in the 12 weeks since the end of March, reversing earlier price falls.

Town houses also continued to record gains in asking prices, by another 1.1 per cent in the last three months, to make for an annual increase of 6.8 per cent – the strongest in any segment in the last year. “With interest rates now down and expected to fall further, and much building shelved, we now forecast greater trends towards house price growth, which are likely to set in for some time before we see any relief in the current rate of rent rises,” said Ms Hassanali-Hashmani.

For more information contact:
Farhana Hassanali-Hashmani
HassConsult
020 4446914/0722 204 765/0733629 786


SNAP SHOTS:

  • The Hass Composite sales Index is representative of all property for sale in Kenya
  • Property values have increased by 3.14 times since 2000
  • The index shows a property price rise of 1.3% in the last quarter and a 0.9% rise in the last year.

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 22.5 million in June 2012.
  • The average value for a 4-6 bedroom property is currently 31.4 million.
  • The average value for a 1-3 bedroom property is currently 11.1 million.

 

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, Town Houses took up 24.5% of the market and Stand alone houses took up 52% of the market.
  • In 2012 however, apartments took up 43.6% of the market, Town Houses took up 26.9% of the market and Stand alone houses took up 29.5% of the market

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 3.7 times since 2001, a 2.7% rise in the last quarter and a 1.9 rise in the last year.
  • The average price for a stand alone house is currently 32.6 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 2.9 times since 2001, a 1.1% rise in the last quarter and a 6.8% rise in the
    last year.
  • The average price for a town house is currently 19.1 million up from 6.5 million in December 2000.

SNAP SHOTS:

  • Apartments include apartments, duplexes and triplexes.
  • Property values for apartments have increased by 2.2 times since 2001, a 0.5% rise in the last quarter and a 3.0% rise in the
    last year.
  • The average price for an apartment is currently 11.7 million up from 5.2 million in December 2000.Apartments include apartments, duplexes and triplexes.

SNAP SHOTS:

  • The Hass Composite Letting Index is representative of all property for rental in Kenya
  • Rents have increased by 2.6 times since 2001
  • The index shows rents have risen by 2.2% in the last quarter but have risen by 7.7% in the last year

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. 102,044 in June 2012.
  • The average rent for a 4-6 bedroom property is currently Kshs. 148,998
    The average rent for a 1-3 bedroom property is currently Kshs. 60,122

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, Town Houses took up 20.5% of the market and Stand alone houses took up 34.1% of the market.
  • In 2012 however, apartments took up 56.3% of the market, Town Houses took up 19.6% of the market and Stand alone houses took up 24.1% of the market

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 2.7 times since 2001, a 2.3% rise in the last quarter and a 8.3% rise in the last year. The average rental for a stand alone house is currently Kshs. 156,396 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 2.3 times since 2001, a 2.9% rise in the last quarter and a 4.1% rise in the last year. The average rental for a town house is currently Kshs. 99,288 up from Kshs. 42,688 in December 2000.

SNAP SHOTS:

  • Apartments include apartments, duplexes and triplexes.
  • Rental values for apartments have increased by 2.8 times since 2001, 2.4% rise in the last quarter and an 11.7% rise in the last year. The average rent for an apartment is currently Kshs. 64,295 up from Kshs. 21,638 in December 2000.
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