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Confidence in the midst of slowing house prices

REAL ESTATE
By Ferdinand Mwongela | February 9th 2017

Last week saw the release of two of the leading house price indices: the Hass Property Index and the KBA Housing Price Index.

What stood out was the agreement between the two reports that while many had expected the capping of interest rates to drive home loans uptake, this remained to be seen, with banks lending more cautiously over the last quarter of 2016.

Also indicative of trends in the market was the slowdown in price changes over the same period, with some areas seeing a drop in prices. While the KBA index was quite confident  that there would be little change due to elections this year, it will be interesting to see what the figures say once reports come out for the first quarter of 2016.

In 2013, the market was quite subdued, some blamed the uncertainty due to elections on the back of the 2007 chaos immediately after elections. This year, analysts expect a more positive attitude from investors and hope the market will bounce right back immediately after the polls.

It was also during the week that Cytonn Investments announced that it had acquired a 25 per cent stake worth Sh1 billion in Superior Homes. This is already an indicator that big deals are not going to wait.

Superior Homes is the developer behind Greenpark, a 165-acre development in Athi River. According to the two sides, the deal is complementary, with Superior Homes getting “a partner that has a strong track record in master-planned developments and also construction capabilities, and in Cytonn, Superior Homes gets a partner that has a strong track record in structuring real estate investment products”.

A statement put out by Cytonn Investments said there was an option for further purchase over the near term.

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