Kenya's political uncertainty is having a negative impact on the property market

The electioneering period in Kenya has had a negative impact on the property market.

The electioneering period in Kenya has had a negative impact on the property market resulting in 1.9% and 0.3% decline quarter over quarter in asking prices and rents, with apartments accounting for the biggest drop.

According to Hass Consult House Price Index Q3 2017 report, the aftermath of the Supreme Court ruling which overturned the Aug 8 presidential vote there is a slowdown in buying activity as there is a lack of clarity on when there will be a conclusion to the electioneering period.

In the report, Hass Consult Limited,a real estate firm,notes that there was a spike in activity up 400 per cent in the three weeks following the announcement of election results in mid-August as the assumption then that the electioneering period was over.

However, the Supreme Court's directive for a new election saw buyers adopt a wait-and-see approach that had been taken towards the run up to the August 8 polls.

“We saw activity pick up from mid-August as buyers who had held off on purchasing decisions came back to the market but the current uncertainty moved sales momentum back to the pre-election period. Buyers are sensitive to risks associated with the political process and are therefore unlikely to make decisions until there is an end to this period,” said Ms. Sakina Hassanali, Head of Development Consulting and Research at HassConsult.

Overall, property prices recorded a 1.8 per cent drop over the quarter and 5.1 per cent drop on an annual basis.

Pockets of growth were however observed in suburbs in or close to the diplomatic zone despite a despondent market. Properties in this area as well as suburbs along Limuru Road were of interest to investors where sustained demand offers a return in a market that is slow due to the aforementioned uncertainty due to the political environment.

Gigiri,a residential estate in Nairobi, is the best performing suburb up 4.8% over the quarter while Muthaiga is the top performer on an annual basis up 12.5% manly driven by investors who see value in buying houses in the areas that serve the diplomatic corps and expatriate community.

On the rental front, asking rents dropped by 0.3 per cent. As the country's political uncertainty creates a knock on effect on economic growth, rental hikes across the country have been minimal while falls were witnessed in many of Nairobi's main suburbs.

“A slowdown in economic activity has a direct impact on wages as firms become more aggressive on cost management. We expect the sluggish growth in incomes has resulted in a stagnation of market rents” added Ms. Sakina Hassanali.

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.

Eyewitness? Submit your stories now via social or:

Email: news@pulselive.co.ke

Recommended articles

Africa’s richest man Aliko Dangote poised to overtake another Russian billionaire Vladimir Lisin on Bloomberg billionaires list

Africa’s richest man Aliko Dangote poised to overtake another Russian billionaire Vladimir Lisin on Bloomberg billionaires list

Mzee Kibor's will made public, revealing how vast wealth and millions will be distributed

Mzee Kibor's will made public, revealing how vast wealth and millions will be distributed

Ini Edo posts new photos amid reports of welcoming a baby through surrogacy

Ini Edo posts new photos amid reports of welcoming a baby through surrogacy

Referee behind chaos at AFCON was rushed to hospital after match

Referee behind chaos at AFCON was rushed to hospital after match

Eddie Butita speaks on his fallout with Miss Mandi, offers her a job

Eddie Butita speaks on his fallout with Miss Mandi, offers her a job

Africa's richest man, Aliko Dangote, adds extra $915 million to his vast wealth in Q1 2022

Africa's richest man, Aliko Dangote, adds extra $915 million to his vast wealth in Q1 2022

Zuchu forced to apologize to fans after viral video raised eyebrows

Zuchu forced to apologize to fans after viral video raised eyebrows

Willy Paul wins against Diana Marua in court

Willy Paul wins against Diana Marua in court

KDF moves to forcibly acquire Sh 500M supermarket land in Nairobi

KDF moves to forcibly acquire Sh 500M supermarket land in Nairobi