Hass Index Quartely and Annual Reports

  solid Property market unresponsive to higher asking prices as land price crisis looms

• Asking prices rose more slowly in the first quarter of the year than in the final quarter of last year, but the gap between asking and  closing prices continued to widen, driven by ambitious pricing of apartments and maisonettes.
    • Mid market villas recorded the highest price rises of the quarter while up-market villa prices were stable.
    • Apartments and maisonettes are now rarely closing at asking prices, and the market is not supporting price rises in this segment.
    • The rental market remained depressed, with rents asked for townhouses notably falling in the first quarter.
    • The slower rise in rents than in house prices brought further falls in rental yields for landlords, to now 5.62 per-cent.

 Index Highlights:

 

Hass consult today unveils the results of its asking and closing residential property indices with evidence of a continuing solid property market, but little upwards momentum in house prices and ongoing falls in rental yields.


"The surge in asking prices at the end of the last year had a little impact on closing prices at the upper end of the market, in either the fourth quarter of 2010 or the first quarter of this year”, said Farhana Hassanali, commenting on thelatest data from January to March 2011.

"We continue to see a smooth sales flow at current pricing, but no over-demand, no housing shortages in the upper market, and no momentum to support the high asking prices still being sought by many sellers. The only area of substantive price growth is middle-market villas"

At the same time, the continuing dip in rental yields “is reaching a point where we expect it will begin to discourage new landlords from entering the market,” she said.

Hassconsult also today warned of trouble ahead for the country’s real estate market as a result of soaring land prices in and around urban areas, saying current trends could leave the country’s cities with a ‘dead stock’ of outer-city apartments and maisonettes.

“Prime development areas, such as Mombasa Road and Thika road, have seen land prices rise four-fold in the last four years. As developers seek to cover these land costs, we are seeing them developing high-density housing, such as apartments and maisonettes. Yet there are high chances that these properties in some of these outer-city areas will soon reach over supply.” Said Ms Hassanali.

“The real danger is that instead of building what consumers will buy, developers are going to repeat the mistake of building what they believe will deliver the highest returns, leaving our cities ringed with a dead stock of unused housing.”

The disparity in demand was already apparent, the agency reported.

“Overall the last two quarters, we have witnessed a great momentum in the sale of mid market villas in Nairobi’s peripheral areas with these offering a better lifestyle opportunity than developments of apartments and maisonettes in similar areas. The buyers of these villa developments are happy to bear the extra commute in exchange for a suburban lifestyle that one would expect in these areas.”

“However, in the case of apartments and maisonettes’, the increased densities, just like city developments, have deterred buyers from making the move and as the price gap between city and peripheral houses narrows, developers will face increased competition from city housing”.

The challenge for developers was to cover now astronomical land prices while building properties that would sell, rather than be left vacant for years to come, the agency concluded.

   

 SNAP SHOTS:

•The Hass Composite Sales Index is representative of all property for sale in Kenya.
• Property values have increased by 3.06 times since 2000.
•The index shows a property price rise of 4.4% in the last quarter and a 15% rise in the last year.

 

 

 

 

 

 

 

 

 

 

 

 SNAP SHOTS:

 •  The annual average is representative of the average price of all properties offered for sale in Kenya.
  •  The average value of a property has gone up from 7.1 million in December 2000 to 21.94 million in March 2011.
  •  The average value for a 4-6 bedroom property is currently 28.87 million.The average value for a 1-3 bedroom property is currently 10.77 million.

 

 

 

 

 

 SNAP SHOTS:

• The mix by year is a measure of the percentage that each type of property represents in the market.
 • In 2001, apartments took up 23.5% of the market, Town Houses took up 24.5% of the market and stand alone houses took up 52% of the market.
 • In 2010 however, apartments took up 35.5% of the market, Town Houses took up 23.6% of the market and Stand alone houses took up 40.9% of the market.

SNAP SHOTS:

• Stand Alone houses include houses, bungalows, cottages and villas either on their own plot or in a gated community.
• Property values for stand alone houses have increased by 3.6 times since 2001, a 5.5% rise in the last quarter and an 18.8% rise in the last year. The average price for a stand alone house is currently 31.5 million up from 8.8 million in December 2000.

 

SNAP SHOTS:

• Town Houses include townhouses and maisonettes that are semi-detached or terraced.
•  Property values for town houses have increased by 2.65 times since 2001, a 2.1% rise in the last quarter and an 9.2% rise in the last year. The average price for a town house is currently 17.36 million up from 6.5 million in December 2000.

SNAP SHOTS:

• Apartments include apartments, duplexes and triplexes.
• Property values for apartments have increased by 2.18 times since 2001, a 2.0 % rise in the last quarter and an 11.9% fall in the last year. The average price for an apartment is currently 11.36 Million in December 2000.

   

 

 SNAP SHOTS:

•  The Hass Composite Letting Index is representative of all property for rental in Kenya.
• Rents have increased by 2.45 times since 2001.
•The index shows rents have risen by 1.2% in the last quarter but have fallen by 6.5 in the last year.

 

 

 

 

 

 

SNAP SHOTS:

• The annual average is representative of the average rent of all properties offered to let in Kenya.
 • The average rental for a property has gone from Kshs. 38,516 in December 2000 to Kshs. 94,671 in March 2010.The average rent for a 4-6 bedroom property is currently Kshs. 145,000.The average rent for a 1-3 bedroom property is currently Kshs. 55,000.

 

 

 

 

 SNAP SHOTS:

 • The mix by year is a measure of the percentage that each type of property represents in the market.
     •In 2001, apartments took up 45.3% of the market, Town Houses took up 20.5% of the market and stand alone houses took up 34.1% of the market.
    • In 2010 however, apartments took up 50.2% of the market, Town Houses took up 18.2% of the market and Stand Alone houses took up 31.6% of the market..

 

 

SNAP SHOTS:
•Stand Alone houses include houses, bungalows, cottages and villas either own plot or in a gated community.
•Rental values for stand alone houses have increased by 2.5 times since 2001, a 2.1% rise in the last quarter and an 10.5% rise in the last year. The average rental for a stand alone house is currently Kshs. 143,968 up from Kshs. 56,959 in December 2000.

 

SNAP SHOTS:

•  Town houses include townhouses and maisonettes that are semi-detached or terraced.
• Rental values for town houses have increased by 2.3 times since 2001, a 1.8% rise in the last quarter and a 5% fall in the last year. The average rental for a town house is currently Kshs. 97,715 up fromKshs. 42,688 in December 2000.

SNAP SHOTS:

 •Apartments include apartments, duplexes and triplexes.
 • Rental values for apartments have increased by 2.59 times since 2001, a 1.3% fall in the last quarter and a 4.4% rise in the last year. The average rent for an apartment is currently Kshs. 21,638 in December 2000.