Kenya’s real estate sector is set to expand in 2018, as the wave of political uncertainty dissipates, ending a period of price correction experienced in 2016 and 2017, according to a real estate report released on Tuesday.
According to the Knight Frank Kenya Report, the country’s prime residential market is anticipated to recover within the first half of 2018.
The inaugural Inside View Kenya report shows that the prime residential prices increased by 0.9 percent in the nine months to September 2017 compared to a one percentage point decline in a similar period in 2016.
The findings indicates that a 2.8 percent decline in prime residential rents was recorded in the first six months of 2017, which was an improvement compared to the 3.2 percent decrease experienced in a comparable period in 2016.
“An oversupply of prime properties for rent is behind the weaker prime rental growth, which has given tenants more leverage to negotiate with landlords. In a market dominated by expatriate tenants, corporate budget cuts by multi-national firms have further influenced the performance of the high-end residential segment,” the report states.
Ben Woodhams, Managing Director at Knight Frank Kenya noted that despite the sluggish performance of prime residential rents in 2017, it is projected that the market segment may be reaching its cyclical trough and is about to turn around.
Woodhams said transactional activity in sales is expected to pick up in 2018 with Nairobi and Mombasa seen attracting interest from local and international buyers. Enditem