Housing prices in Kenya declined during the third quarter of 2024, opening new doors for aspiring homeowners. Real estate developers are facing tough times following a drop in house prices. Why aspiring Kenyan homeowners can smile This is according to the latest report by the Kenya Bankers Association (KBA), whose housing pricing index showed home prices fell by 1.1% during the period under review and 14.28% year-on-year. KBA director of research Samuel Tiriongo said the slowdown in house prices reflects a shift in the market, signalling tough times for developers.
However, he noted that banks have reduced lending rates, and this could raise demand in the coming months. “We are seeing a correction in prices due to reduced speculative buying and changing financing conditions. At the same time, banks have started adjusting their lending policies to support homebuyers, which could stimulate demand in the coming months,” Tiriongo explained. Credit to Kenyan real estate sector rises In the third quarter of 2024, credit to the real estate sector grew marginally by 2.36%, but loans disbursed to the construction sector dropped by 13.47%. According to KBA, some developers are having trouble obtaining funding for new projects, which may cause the supply of new homes to slow down. “The construction sector contracted by 2.0% in the third quarter of 2024, pointing to a difficult period for builders. However, cement consumption increased from 1.96 million metric tonnes in the second quarter to 2.20 million metric tonnes in the third quarter, suggesting ongoing construction activity, likely driven by government-backed housing projects and infrastructure development,” the report stated.
Why aspiring homeowners should be careful A Kenyan real estate expert, Okowa Nashon, shed light on the often-overlooked pitfalls when buying serviced plots in subdivision schemes, emphasising the importance of thorough scrutiny before making a purchase. Okowa, the director of Beacon Africa, a real estate advisory and consulting firm, cautioned Kenyans that sellers often misrepresent electricity and water connections. He noted that while power lines are usually visible during site visits, the applied power capacity often falls short of meeting the anticipated consumption needs once the plots are fully occupied.
by Japhet Ruto
