Houses in Nairobi's Donholm Estate recorded the biggest quarterly drop in rental prices at 4.8 per cent, a quarterly survey by HassConsult shows.
The second quarter of the year survey shows a downward pressure on rents as COVID-19 pandemic slashes disposable income. According to the survey close to half of tenants reached out to asked for rent discounts of between 25 and 30 per cent.
“COVID-19 has resulted in the closure of many industries across the economy and thereby reducing incomes of business owners and employees who are in turn exerting pressure on landlords to reduce rents,” said Sakina Hassanali, Head of Development Consulting and Research at HassConsult.
Donholm suburb recorded the biggest quarterly drop in rents for houses at 4.8 percent while on an annual basis Kitisuru led the pack with rents reducing by 7.7 percent.
Parklands backed the trend in the suburbs with apartments rents in the area marginally increasing by 2.4 percent over the quarter and 7.1 percent over the year.
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In the satellite towns, Mlolongo led the pack with apartment rents falling by 2.6 percent over the quarter and 9.8 over the year while Kiserian and Thika saw gains of 6.7 per cent and 10 percent over the quarter and year respectively.
Apartments similarly recorded the strongest growth in rents at 2.2 percent against the overall property rents slight drop of 0.3 per cent.
On the sales front HassConsult notes that prices have remained relatively flat as developers and other sellers avoid generous discounts on properties or increasing prices as they wait to see how the economy will perform once it is fully reopened.
“This is the first full quarter under COVID-19 showcasing the property market under the government's strictest social distancing measures which have since been eased. Property prices remain stable as most sellers, presumably those without any urgent cash flow requirements, are avoiding making rash decisions that will cost them in the long run.” said Hassanali.
Hassanali added that in some instances the Central Bank of Kenya (CBK) guidelines that are encouraging banks to offer clients moratoriums and renegotiating loan terms have offered some reprieve to developers and others borrowers who had facilities on properties.
Overall prices dropped by 0.2 per cent over the quarter but marginally increased by 2.9 per cent on an annual basis.
Houses in Muthaiga recorded the highest asking prices over the quarter at 3.6 percent while Riverside recorded the lowest drop with apartment prices marginally reducing by 2.6 percent.