Falling apartment prices in Kilimani and Kileleshwa weighed down the Nairobi property market into negative price growth in the 12 months to June, dampening hopes of a recovery in the sector hit hard by the Covid pandemic.
A survey by realtors HassConsult found that on average, houses in Nairobi recorded a 1.7 percent price drop in the period, with oversupply causing apartment prices to fall especially in the upper middle class localities.
Affordability is also an issue due to the massive job losses and pay cuts experienced by many Kenyans in the past 15 months.
Business performance has also been negatively affected by the pandemic, thus robbing developers many would be buyers who are instead looking to conserve cash due to the uncertain times.
“The property market is experiencing static sales price performance driven by the oversupplied apartment market in Kilimani and Kileleshwa, down 9.5 percent and 6.9 percent respectively in the last year,” said HassConsult.
Apartments on average recorded a 5.8 percent drop in price during the period, far ahead of detached houses whose prices dropped by 1.7 percent, and semi-detached units whose prices went up by 0.7 percent on average.
While prices remained in the red, rents continued to rise, driven by higher demand for semi-detached houses and apartments in areas such as Langata, Ruiru and Parklands.
“This was heavily backed by the increase in rental prices of detached houses up 3.4 percent in the second quarter of 2021, symptomatic of the people within large international and multinational organizations who continue working from home and whose elimination of mobility costs have enabled higher housing budgets,” said HassConsult.