The subdued economy saw general cost of houses end on a low in the last quarter of 2020, however, the residential rental prices registered a surprise surge.
Latest figures by real estate agents Hass Consult shows that sales prices remained quiet in the months of October, November and December, in a 1.2 per cent drop.
This dip was mainly attributed to the slow economic recovery at the time, which was occasioned by the coronavirus pandemic global shocks.
Surprisingly, the period under review saw residential rental prices gain pace by 1.1 per cent in areas like Kilimani and Kileleshwa, despite falling apartment rents by 1.24 percent.
Residential rental property refers to homes that are purchased by an investor and inhabited by tenants on a lease or other type of rental agreement while renting an apartment (apartment rents) means entering into a legal arrangement with a landlord or the owner of the property to live in the space for an agreed-upon fee, normally charged monthly.
“The sheer volume of new stock created rental price vulnerability for larger and older stock during the economic slowdown caused by 2020’s global pandemic, resulting in rental price corrections,” said Sakina Hassanali, head of development consulting and research at Hass Consult.
This means that more residential properties were sold in the quarter under review as Covid-19 pandemic reshaped the demand pushing prices in a period that saw most Kenyans struggle to meet their basic needs.
But the market is not expected to improve this year either, according to predictions by a 2021 Real Estate Market Outlook by Cytonn Real Estate, commercial offices and listed real estate sectors may record negative performance.
This can also be informed by the fact that most property developers took advantage of the Central Bank of Kenya (CBK) appeal by banks to extend and restructure all loans under emergency measures.
The CBK had in March 2020 encouraged distressed borrowers to negotiate for a new repayment schedule with their lenders.