We are in May already. Some of you have probably not even started the year yet. Not to worry, we have 8 more months to go.
Last year the real estate industry in Kenya was booming, however, when the housing levy was announced critics were expecting the industry to go in panic. But it seems Kenyan real estate is still unaffected.
Or is it?
With the increase of Chinese developers, it seems real estate has been notched higher. Take a look at Ngong road, you won’t even know if Kenyans live there, the Chinese have taken over. Que the hysterics. Don’t be alarmed, we still own Kenya
Or do we?
Back to the topic at hand, is Kenyan housing still going to flourish as the year progresses? The answer is a big fat yes. We are thriving. Despite the scepticism around the affordability of housing. People are buying houses even if you are not.
However, we have people postponing buying home we can wonder if house buying will actually increase by the end of the year. It seems most people plan on buying in 2020. Looking in 2018 market, buyers were expected to buy this year, but now it’s been pushed to next year.
Can timing be blamed?
Slow home price appreciation active for quite some time now, combined with lower mortgage rates are surely bringing the housing market out of the overheating market, while housing sales fell by 1,2%, touching the lowest performance in the last three years.
While this case could represent a marvellous opportunity for home buyers in the upcoming spring, analysts and real estate agents are convinced that few house listings and the rising rates for buying homes is killing the business.
Due to the fact that mortgage rates dropped, it was expected to see a rise in the sales of real estate in January 2019, however, this was not the case.
Sales are still steady
Average prices for real estate have on the other hand increased in oppose to the prices active during the last year. unfortunately, it seems housing sales have dropped since the beginning of the year.
However, despite the turmoil that real estate agents are facing within the dropping sales, we predict that the sales should soon come out of its cyclical lows with moderating house prices, which should increase the affordability of real estate that way also boosting the sales in the upcoming period.
Additionally, we are predicting that more buyers should be attracted to the market in the following months.
One of the biggest obstacles for achieving this case scenario lies in the fact that the number of homes that could be categorized as affordable is not rising fast enough, however, many analysts believe that the decreased mortgage rates will bring more buyers to the market combined with lower prices for real estate.
The bottom line:
With the developments in Kenya on the rise, so will the housing sector. Rural areas that were not open are blooming meaning investors are going to throw their hands in. As a wise man, it is better to tap into before the economy shifts throwing everything off balance.
Although this year we have seen people focus more on buying to invest instead of residing. It has shifted the housing sector as an investment platform rather than providing shelter. Moreover, this turn of housing developments for investment was expected to increase revenue for both the government and private sector.
Unfortunately, most properties are on the luxury side causing slow progress in home buying. Who can be blamed for this? Are the property developers only focusing on the upper scale of the middle class?
It has left wonder in most minds on whether the luxury housing will sell if most are actually empty. Despite the negative pull, we expect the rise in home buyers as the year ends if not when 2020 begins.
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