• Home buyers becoming more interested in number of rooms than size of unit.
Home buyers are shifting interest and focusing on the number of bedrooms in units.
In a recent survey done by Kenya Bankers Association, buyers' preferences in the three months to March have moved away from entire area covered by an apartment or house.
As a result, the plinth area has had no influence on house prices while the number of bedrooms and bathrooms had a significant positive effect.
“This indicates a trade-off between the size of the house and attributes of how many people it can potentially accommodate,” the KBA house price index showed.
The index also showed that being in a gated community, the presence of a back-up generator and parking had a muted effect on house price movements, unlike in previous periods.
This corresponds to negative effect on house prices from presence of elevator, borehole and Domestic Staff Quarters (DSQ).
The drag in prices implies the associated higher service charge that comes with the facilities and price sensitivity of buyers at the backdrop of constrained budgets.
Similarly, buyers would rather use the DSQ as an additional bedroom rather than space for letting out.
KBA director of research and policy Jared Osoro however termed the effect provisional while pointing to homeowners' taste inconsistency.
“The dynamics influencing price however don't distinguish if people are buying houses for home ownership or for purposes of investing for returns,” he said.
This reinforces a 2018 report released by estate management firm Knight Frank that showed the growing interest in Airbnb accommodation. Investors were turning high-end properties in Nairobi and Coast into cheaper living spaces for travellers.
The survey by KBA also showed that location of the buildings matters in determination of house prices.
The price of houses in the upper and middle market income were on average higher compared to lower income segments which include Athi River, Mlolongo, Mavoko, Nakuru, Embakasi, Mtwapa, Utange, Kitengela, Kiembeni, Nyeri, Likoni, Eldoret, Ruiru, Kilifi,Thika road, Meru, Bungoma.
Areas like Thindigua on Kiambu Road, Kiambu, Komarock, Rongai, Waiyaki Way and Ngong Road fall under middle income segments.
Upper markets include Kileleshwa, Kilimani, Spring Valley, Riverside, Milimani in Kisumu and Nakuru, Ridgeways, Loresho, Adams Arcade and Nyari.
“This suggests that enabling increased housing supply in desirable locations will result in improved amenity relative to supplying new housing in less desirable locations,” it showed.
The overall rate of growth in house prices declined by by 2.78 per cent, marking a five-year low.
The house price index for the three months released on May 24 was recorded at 123.56 compared to previous quarters with 1.49 per cent growth (126.99) in Q4 of 2018 and 1.35 per cent growth (125.10) in Q3 2018.
The decline was attributed to squeezed budgets, cautionary stance of many households and difficult economic environment brought about by constraints in credit access.
This has made it difficult for customers to buy houses from their income or access loans. The effect has also affected the developers in bringing up new buildings across all segments.