Hass Index Quartely and Annual Reports

  Housing prices more subdued amid lower economic growth

• Closing prices across upper-end properties fell by 2.0 per cent in the second quarter
• The rise in asking prices cooled,rising by just 1.9 per cent in the second quarter,compared with 4.4 percent in quarter
    one.
• Rental prices were unchanged in quarter 2,reflecting a further fall in the proportion of household spent on rent.
•  Buyers showed marked reluctance to pay higher property prices
• Developers suffered marked profit erosion,with some now reviewing building plans.

 Index Highlights:

 

Unveiling the results of the Hass residential price indices for the second quarter of 2011, Hass Consult today reports a gentle cooling down in house prices in the second quarter, consistent with the concurrent slowdown in economic growth and erosion of disposable incomes.

“This is a gentle landing,” said Farhana Hassanali of Hassconsult, “and entirely consistent wit the slower economic growth that has followed from soaring oil prices and the uptick in inflation and living costs.”

Unveiling the detailed results, Hassconsult reported the slowdown as more evident in closing prices, which fell by 2 per cent in the second quarter, following from subdued growth of 1.8 per cent in the first quarter.

However, the ongoing patterns of ever-more ambitious asking prices also eased notably between April and June of this year.
Where asking prices jumped another 4.4 per cent in the first quarter of the year, they rose by just 1.9 per cent in the second quarter.

“We saw relatively few issues of property sales actually delayed, and there continues to be a pipeline of buyers, but we are no longer seeing the kind of pent up demand necessary to keep pushing prices significantly higher,” said Ms. Hassanali.

“The market is currently absorbing the new build, normally within weeks, and most especially at the value end of the market in off-plan purchasing. But we are seeing little evidence of buyers upping their offer prices to secure properties they are in danger of losing to competing buyers.”

“Instead, the continuing rise in asking prices is being driven by ambitious buyers who are then closing sales at somewhat lower final prices.”
Within the housing mix, asking prices stabilized most in the standalone houses segment, spanning houses, bungalows, cottages and villas. This segment saw asking prices rise by just 1.5 per cent in the second quarter.

Price rises were sought most actively for town houses and maisonettes, where they rose by an average 2.9 per cent in the second quarter, followed by apartments, where they rose by 2.0 per cent.

“But in the apartment market, particularly, we do see a notable margin between asking prices and final closing prices,” said Ms. Hassanali.
In the rental market, asking prices were static between April and June, up by an average of just 0.1 per cent.

This followed from a fall of 2.4 per cent in the asking rentals for town houses and maisonettes, which was offset by a 1.3 per cent rise in asking rentals for apartments and 0.3 per cent rise in the asking rentals for standalone houses.

“Both trends of nearly flat sales prices, and flat rental prices, come as consumers are pressed by rising inflation across food, school fees and consumer goods,” said Ms. Hassanali.

“In this, rents now represent a single island of price stability, being the only item in the household bill that is not now spiraling upwards.”

“We believe this may reflect a long term adjustment in rental returns on rented property. Rentals have traditionally consumed a higher proportion of household incomes in Kenya than is normal globally, reflecting the general shortage of housing. But that proportion of spending on rental now looks to be shifting downwards, possibly permanently, on the back of a decade of greater housing supply.” In house sales, however, the current situation could be more disruptive, she said.

“There is a time lag on developers being impacted by rising oil prices, and in building materials, but we are seeing a growing number of cases where developers are approaching buyers for higher prices, because their profits have been eroded or now completely removed.”

“This situation is likely to get more strained in the coming months, with developers seeking to cover costs and buyers entering the market with tighter budgets, and could see some patchiness in pricing and some delays in completions.”

For more information:

Farhana Hassanali

Property Development Manager

HassConsult
This email address is being protected from spambots. You need JavaScript enabled to view it.

   

 SNAP SHOTS:

•The Hass Composite Sale Index is representative of all property for sale in Kenya.
•  Property values have increased by 3.11 times since 2000.
• The index shows a property price rise of 9.1% in the last quarter and an 15.7% 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 for a property has gone from7.1 Million in December 2000 to 22.35 Million in June 2011.  The average value for a 1-3 bedroom property is currently 11.21 Million.

 

 

 

 

 

 SNAP SHOTS:

• The  Mix by year is a measure of the percentage that each type of property represents in the market.
• In 2001, apartment took up 23.5% of the market, Town Houses took up 25.5% of the market and stand alone houses took up 52% of the market.
• In 2010 however, apartments took up to 35.5% of the market, Town Houses took up 23.6% of the market and stand alone houses took up 40.95 of the market.

SNAP SHOTS:

• Stand Alone houses include houses, bungalow, cottage and villas either on their own plot or in a gated community.
•Property values for stand alone houses have increased by 3.64 times since 2001, a 1.5% rise in the last quarter and a 17% rise in the last year. The average price for a standalone house is currently 32 Million from 8.8 Million in December.

 

SNAP SHOTS:

• Town houses include town houses and maisonettes that are semi – detached or terraced.
• Property values for town houses have increased by 2.73 times since 2001, a 2.9% in the last quarter and a 14.7% rise in the last year. The average price for a town house is currently 17.86 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.