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Bankers: Apartments driving house prices in Kenya

REAL ESTATE
By Mkala Mwaghesha | July 30th 2015
Kenya Bankers Association CEO Habil Olaka speaks during the release of the index. [PHOTO: WILBERFORCE OKWIRI / STANDARD]

NAIROBI: Apartments are still the main driving force in housing prices across the country, says the just-released Kenya Bankers Association (KBA) Housing Price Index for the second quarter of the year.

According to the index released on Monday in Nairobi, the price of apartments is increasing faster than that of bungalows and maisonettes.

The index has also revealed that the demand for apartments has seen investors buy other properties with the intention of converting them into apartments.

“We have found that in the high-end of the market demand for bungalows hinges on the desire to redevelop the property into apartments,” said KBA Director of Research and Policy Jared Osoro.

Like in the previous quarter, the index revealed that there is demand for properties with more bedrooms and bathrooms and that the size of a unit was a key price driver.

PRICE DRIVERS

Availability of a backyard and staff quarters was also a price-driving factor, as was the size of land and social amenities around the property.

The demand for these amenities has led to the increase in the number of gated communities that have all the facilities in one area.

House prices have increased by 0.2 per cent, a drop compared from the 2.75 per cent rise experienced in the previous quarter. The fall is said to reflect a stabilising housing market in line with demand and supply dynamics.

Houses located in the high-end suburbs of Nairobi, Milimani in Nakuru and Kisumu witnessed a faster price movement.

KBA CEO Habil Olaka was upbeat about the response the index has garnered, saying it is a reflection of the demand of information in the market.

“We are pleased that despite being introduced to the market just seven months ago, the KBA-HPI has garnered traction and the tool has drawn significant interest both locally and internationally,” he said, adding: “This is a reflection of the market’s need for a robust instrument for assessing house price movements.”

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