Developers count losses in housing market slump
SEE ALSO :Water features for your homeMaisonettes and bungalows, on the other hand, recorded a 10 per cent and 8 per cent decline respectively over the same period. “The limited availability of funding to the housing market has been on the back of increased levels of non-performing loans generally and especially the construction sector,” explains the index in part. “This factor has had a negative bearing on the risk appetite of lenders.” Earlier this year, Hass Property Index reported a glut in the high-end market for residential properties with robust demand in the middle and low-end market segments. Attrition in numbers Hass Consult attributed the slowdown in demand at the top end of the market to both global and local policy factors such as the flight of international residents. This is said to have eroded much of the tenant pool targeted by developers of high-end bungalows and maisonettes.
SEE ALSO :Report: Retail sector performs poorly“This steady attrition in numbers was accelerated last year in the new government drive curbing work permits,” explained Hass Consult Head of Development and Research Sakina Hassanali. “This triggered a new uptick in international departures, which by the first quarter of 2019 had resulted in significant falls in the sales prices and rents of top-end detached houses, which fell by 4.4 per cent and 4 per cent respectively in the first 12 weeks of the year.” Data from the Central Bank of Kenya’s (CBK) latest credit officer survey indicates that the real estate, manufacturing and building and construction sectors ranked among the highest in non-performing loans as at the end of December 2018. “Credit Standards remained unchanged in 10 economic sectors in the fourth quarter of 2018 except in Real Estate sector where the credit standards were tightened in order to reduce the level of NPLs in the sector,” explained the CBK in part. [email protected]
Do not miss out on the latest news. Join the Standard Digital Telegram channel HERE.