Hass Index Quartely and Annual Reports

Quarter 3 2014

Housing market moving into a renewed up-cycle

• The growth in asking prices for property accelerated in the third quarter, up 3.1 per cent on the previous quarter, and 4.7 per cent on a year earlier
• The price rises were strongest for apartments, up 3.6 per cent on Q2, followed by detached houses, up 3.2 per cent and semi-detached rising 2.4 per cent on Q2
• However, asking prices for rents slowed down sharply, following consistently strong rises in every quarter for the last three years.
• Overall rent rises recorded their lowest rate of quarterly increase in September 2014 since 2011, at 0.4 per cent
• This pattern of flattening rents and rising sales prices is indicative of a housing market moving into a renewed up-cycle
• The total returns on let properties are now highest for semi-detached houses, at 16 per cent, followed by apartments, at 13 per cent, and detached houses, at 10 per cent compared with a return of 8.65 per cent on 91-day Treasury Bills

 

 

 

HassConsult today unveiled the results of its third quarter property price indices, revealing a takeoff in asking prices for properties, a slowdown in rent rises, and a restoration of the high returns on investment in the Kenyan housing market.

“The market correction to rents that we flagged in 2011 - as property yields moved to lows of around 7 per cent - now appears to be reaching its conclusion and we are moving into a new period of take off in sales prices and investment returns,” said Ms Sakina Hassanali, HassConsult's Head of Research and Marketing.

House price inflation – which was particularly sharp in 2008 - saw yields on properties fall, as rents stagnated. By 2011, this had seen some slowing of demand for properties as shorter term investments, seeing house price rises slow down and rents begin to surge upwards.

“Rents rose by more than 30 per cent in the 18 months from January 2012, in a steep and continuous upwards trend, but the growth has slowed during 2014, to just 0.4 per cent in the third quarter,” said Ms Hassanali.

'While we see a likelihood of some further rent increases, we believe the market has substantially adjusted and that rents will now be more stable,” she said.

At the same time, asking prices for properties, which had been almost static for apartments and detached houses, moved up significantly in the third quarter, by 3.6 per cent and 3.2 per cent, while semi-detached house prices also continued to rise, but more slowly, up 2.4 per cent on the previous quarter.

The Hass composite house price index is based on 4000 to 6000 property prices per quarter. Over the five years since its launch has tracked more than 100,000 house price records from across Kenya. The data, which captures asking prices, is collected from multiple estate agencies and all publically available housing sales, including in property magazines, on property websites and in the national media.

The composite index, launched at the beginning of 2010, followed the launch in 2009 of the Hass Property Index, based on HassConsult's own closing prices on property sales. HassConsult has continued to gather and compute its own closing price index as an internal reference point, but only publishes the composite asking price index, which is based on now the largest real estate data set in Kenya.

The banks, which see valuations on mortgaged properties, typically handle, in total, some 600 house sales per quarter, which is the number of new mortgages currently issued in Kenya.

“We are delighted that our research team, with six full-time researchers and analysts and two senior consultants, has meticulously compiled such a significant data set, and we shall continue to develop our research base and reporting capabilities,” said Ms Hassanali.

In this vein, HassConsult last year began geomapping the use and land status of every land plot in Nairobi as an intensive primary research programme. It also collects and analyses all planning applications, and produces the annual State of Development report on the real estate sector.

It is now working to collect data on housing demand, looking at the profile of home buyers and housing investors, which it will shortly be releasing as the quarterly Home Ownership Report in partnership with The Property Show.
For more information, please contact:
Sakina Hassanali - Head of Research & Marketing
HassConsult Ltd

 

 

 SNAP SHOTS:

•The Hass Composite sales Index is representative of all property for sale in Kenya
• Property values have increased by 3.57 times since 2000.
• The index shows a property price fall of 3.1% in the last quarter and a 4.7% 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 25.6 million in September 2014.
• The average value for a 4-6 bedroom property is currently 36.5 million.
• The average value for a 1-3 bedroom property is currently 11.8 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, semi-detached took up 24.5% of the market and detached houses took up 52% of the market.
• In December 2013 however, Apartments took up 41.7% of the market, Semi-detached Houses took up 24.0% of the market and Detached Houses took up 34.3% of the market.

 

 

  

SNAP SHOTS:
• Detached houses include stand alone houses, bungalows, cottages and villas either on their own plot or in a gated community.
• Property values for Detached Houses have increased by 4.13 times since 2001, a 3.2% rise in the last quarter and a 3.3% rise in
the last year. The average price for a Detached House is currently 36.3 million up from 8.8 million in December 2000.

SNAP SHOTS:
• Semi-detached houses include townhouses and maisonettes that are semi-detached or terraced.
• Property values for Semi-detached Houses have increased by 3.19 times since 2001, a 2.4% rise in the last quarter and a 8.4%
rise in the last year. The average price for a Semi-detached House is currently 20.9 million up from 6.5 million in Dec 2000.

 

SNAP SHOTS:
• Apartments include apartments, duplexes and triplexes.
• Property values for Apartments have increased by 2.51 times since 2001, a 3.6% rise in the last quarter and a 6.0% rise in the
last year. The average price for an Apartment is currently 13.1 million up from 5.2 million in December 2000.

 

SNAP SHOTS:

•The Hass Composite Rental Index is representative of all property for rental in Kenya
• Rents have increased by 3.30 times since 2001
• The index shows rents have 0.4% in the last quarter but have risen by 8.7% 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. 127,113 in September 2014.
• The average rent for a 4-6 bedroom property is currently Kshs. 200,939
• The average rent for a 1-3 bedroom property is currently Kshs. 70,812

 

 

 

 

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,
semi-detached took up 20.5% of the market and detached houses took up 34.1% of the market.
• In December 2013 however, Apartments took up 54.3% of the market, Semi-detached Houses took up 20.0% of the market and Detached Houses took up 25.7% of the market.

 

 

SNAP SHOTS:
• Detached houses include stand alone houses, bungalows, cottages and villas either on their own plot or in a gated community.
• Rental values for Detached Houses have increased by 3.42 times since 2001, a 0.5% rise in the last quarter and a 7.2% rise in
the last year. The average rental for a Detached House is currently Kshs. 194,765 up from Kshs. 56,959 in December 2000.

 

SNAP SHOTS:
• Semi-Detached houses include townhouses and maisonettes that are semi-detached or terraced.
• Rental values Semi-detached Houses have increased by 3.19 times since 2001, a 1.3% rise in the last quarter and a 12.2% rise in
the last year. The average rental for a Semi-detached House is currently Kshs. 136,110 up from Kshs. 42,688 in December 2000.

 

SNAP SHOTS:
• Apartments include apartments, duplexes and triplexes.
• Rental values for Apartments have increased by 3.16 times since 2001, 0.3% fall in the last quarter and a 9.5% rise in the last
year. The average rent for an Apartment is currently Kshs. 73,400 up from Kshs. 21,638 in December 2000.