Hass Index Quartely and Annual Reports

 Kenyan middle classes shift to cheaper housing in static property market

    •Prices for standalone houses fell by 1.8% in Q4
    •But asking prices continued rising for town houses, up 1%, and for apartments, up 1.4%
    •Rents for standalone houses rose 1.2% in Q4
    •But rents for town houses continued to drop, down another 0.4%
    •Rents for apartments continued rising, up 2.1% in Q4 and 5.7% on a year earlier

 Index Highlights:

 



 Hass Consult today unveiled results for the fourth quarter of 2011 in the prices of house sales and lettings across Kenya.“We are seeing a trend across all sectors of the market of householders shifting to cheaper housing options,” said Ms Farhana Hassanali. The shift comes against a backdrop of squeezed household budgets on inflationary pressures and near static pricing in housing.However, prices rises continue in some areas of the housing market as developers move to recoup higher construction costs.

Overall, asking prices for houses fell by 0.7 per cent in the fourth quarter, compared with prices from July to September 2011. But the falls were confined to pricing for standalone housing, which fell by 1.8 per cent, with asking prices rising by 1.0 per cent for town houses and 1.4 per cent for apartments from October to December.


The Hass index of closing prices, based on sales made and concentrated at the top of the market, likewise confirmed some price erosion at the very top of the market, with closing prices down by 1.3 per cent in the final quarter of last year, compared with the third quarter.
“The middle market continues to ask and achieve higher sales prices, as developers recoup the extra costs of land and construction materials in a market where demand remains solid. But at the very top of the market, for villas and standalone houses, there is currently no buyer appetite for further price rises, and sometimes stiff negotiations onclosures that are dampening prices marginally,” said Ms Hassanali.


However, the softening in standalone house prices in the final quarter of the year was accompanied by rising rents in the same section of the market, highlighting heightened interest in renting standalone housing at the same time as demand for buying similar villas and bungalows abates.
At the same time, rental prices continued to fall for town houses, as consumers opted instead to rent cheaper apartments. But town house sales benefitted from ongoing demand, as buyers moved downmarket and bought townhouses instead of standalone villas and bungalows.


The apartments market was the main beneficiary from the move down the property ladder, with the asking prices for apartments rising by 1.4 per cent, and asking rentals by 2.1 per cent from October to December 2011.


“With few mortgage owners, and ongoing economic growth, we see no prospect for a collapse in house prices,” said Ms Hassanali. “Kenya isn't yet oversupplied with housing, or seeing a slice of homeowners needing to sell because they cannot make loan repayments.”


However, HassConsult warned that developers were now under considerable financial pressure. With their profitability already eroded by the rising costs of land and construction materials, they took a serious blow in the second half of the year on rising interest rates. “With cost over-runs, developers with construction underway are now finding it hard to refinance, and new finance is close to unavailable,” said Ms Hassanali.


This had seen almost all developers suspend future phases of building, and downsize current phases, and would certainly
see some projects now suspended mid-build. “It is vital for buyers entering the market at a time when the supply of new homes is suddenly contracting, and even being suspended, to choose solid and reliable developers with strong guarantees,” she said.



   

  SNAP SHOTS:
   • The Hass Composite sales index is a representative all property for sale in Kenya.
   • Property values have increased by 3.06 times since
    2000.
   • The index shows a property price fall of 0.7% in the
    last quarter and a 4.5% 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 for a property has gone from 7.1 million in December 2000 to 21.97 million in December 2011.
 • The average value for a 4-6 bedroom property is currently 29.47 million.
 • The average value for a 1-3 bedroom property is currently 10.69 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 December 2011 however, apartments took up 30.4% of the market, Town Houses took up 23.9% of  the market and Stand alone houses took up 45.7% of the market.

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 December 2011 however, apartments took up 30.4% of the market, Town Houses took up 23.9% of
    the market and Stand alone houses took up 45.7% of the market.

 

 

SNAP SHOTS:

  • Town houses include townhouses and maisonettes that are semi-detached or terraced.
   • Property values for town houses have increased by 2.77 times since 2001, a 1% rise in the last quarter and a 6.8% rise in thelast year.
   • The average price for a town house is currently 18.16 million up from 6.5 million in December 2000.

SNAP SHOTS:
•Apartments include apartments, duplexes and triplexes.
• Property values for apartments have increased by 2.22 times since 2001, a 1.4% rise in the last quarter and an 7% rise in the last year.
 •The average price for an apartment is currently 11.58 million up from 5.2 million in December 2000..

   

  SNAP SHOTS:

•The Hass Composite Letting Index is representative of all property for rental in Kenya
•Rents have increased by 2.48 times since 2001
 •The index shows rents have risen by 1.2% in the last quarter but have risen by 2.3% 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. 96,000 in  December 2011.
 •The average rent for a 4-6 bedroom property is currently Kshs. 140,000.
 •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 December 2011 however, apartments took up 47.4% of the market, Town Houses took up 17.4% of the market and Stand alone houses took up 35.3% of the market.

SNAP SHOTS:

 •Stand Alone houses include houses, bungalows, cottages and villas either on their own plot or in a gated community.
 •Rental values for stand alone houses have increased by 2.55 times since 2001, a 1.2% rise in the last quarter and a 3.2% rise in
    the last year. The average rental for a stand alone house is currently Kshs. 145,000 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 2.18 times since 2001, a 0.4% fall in the last quarter and a 5.9% fall in the last year. The average rental for a town house is currently Kshs. 93,000 up from Kshs. 42,688 in December 2000.

SNAP SHOTS:
•Apartments include apartments, duplexes and triplexes.
•Rental values for apartments have increased by 2.55 times since 2001, 2.1% rise in the last quarter and a 5.7% rise in the last
year. The average rent for an apartment is currently Kshs. 59,000 up from Kshs. 21,638 in December 2000.