Property returns in a near triple as rents begin to rise

Transcription

1 Property returns in a near triple as rents begin to rise Asking rental prices in the quarter increase 3.3 per cent after a year of rent price falls. Landlords initiate rent escalations that had been halted as confidence restored in the market Semidetached houses see the highest quarterly increase with asking rents moving 5.6 per cent and 14.3 per cent respectively on an annual basis Asking prices increase by 3.6 per over the quarter and by 5.1 per cent on an annual basis Despite renewed confidence, the interest rate cap is a hurdle towards the market's full potential Total returns on let property (capital gain + rental yield) surge to 11.4 per cent per annum buoyed by an improving rental market Property Index Highlights: The Hass Composite Sales Index All Properties Detached Houses Semi Detached Houses All Apartments Properties Segment with Highest ly Increase in Sales Price Segment with Lowest ly Increase in Sales Price Segment with Highest Increase in Sales Price Segment with Lowest Increase in Sales Price 3.6% 5.1% 2.41 Fold 3.9% 4.7% 2.36 Fold 4.7% 11.9% 2.70 Fold 1.0% 1.8% 2.29 Fold Apartments in Ngong ( +6.9% over last year) Apartments in Kilimani ( 2.3% over last year) Houses in Ngong ( +15.6% over last year) Apartments in Thika ( 8.1% over last year) The Hass Composite Rental Index All Properties Detached Houses Semi Detached Houses All Apartments Properties Segment with Highest ly Increase in Rental Price Segment with Lowest ly Increase in Rental Price Segment with Highest Increase in Rental Price Segment with Lowest Increase in Rental Price 3.3% 2.8% 1.79 Fold 1.6% 0.8% 1.83 Fold 5.6% 14.3% 2.17 Fold 5.0% 1.2% 1.50 Fold Houses in Tigoni ( +4.8% over last year) Apartments Kileleshwa in Athi (12.0% River ( over 1.9% last over year) last year) Houses in Limuru ( +13.3% over last year) Apartments in Upperhill ( 12.5% over last year)

2 HassConsult today unveiled the Hass Property price indices for the second quarter of showing that total returns on property tripled over the quarter buoyed by rental increases in the semidetached market. Total returns, which comprise of rental yields and property price increases, rose to 11.4 per cent over the quarter, nearly three times the 4.27 per cent that was recorded over the same period a year ago. The double digit growth in total returns is driven by rent escalations as landlords are taking the opportunity to charge higher rents following a return to confidence in the property market. Semidetached houses lead the pack with asking rents increasing by 5.6 per cent over the quarter and 14.3 per cent on an annual basis. Landlords are now confident enough to renew rent escalations which had been halted over the last year due to uncertainty. The biggest beneficiaries are landlords who own units in suburbs and satellite towns that have traditionally been semidetached house markets, said Hass Consult Head of Development Consulting and Research Ms. Sakina Hassanali. Within Nairobi, Kitisuru led the pack with house rents increasing by 2.7 per cent over quarter while Langata posted the highest rent price increases in the apartment segment at 3.7 per cent. Tigoni was the best performing satellite town in house rent price increases, increasing by 4.8 per cent in the quarter while Limuru lead the pack on an annual basis with rents increasing by 13.3 per cent. Ruaka was the top performer in the apartment rental market with asking prices increasing by 3.9 per cent over the quarter and 11.5 per cent on an annual basis. On the sales market, property prices recorded gains as confidence surged despite the effects of the interest rate caps on dulling demand. Property prices rose by 3.6 per cent over the quarter, levels last seen two years ago. It is clear that there is renewed confidence in the market but we are not yet out of the woods as the interest rate caps which have affected liquidity in the market still pose a challenge, said Ms. Hassanali. Gigiri was the top performer within Nairobi with house prices increasing by 2.7 per cent while Westlands led the apartment price rises up 2 per cent in the quarter. Within the satellite towns, Ngong Town saw price rises across the board with house prices increasing by 5.8 per cent and apartment prices up 6.9 per cent over the quarter the highest witnessed in both segments. For more information, please contact: Sakina Hassanali, Head of Development Consulting & Research

3 House Price Trends By Suburb in Nairobi Nairobi Suburbs Property Index All Houses Donholm 1.8 % 5.8 % 3.27 FOLD 0.9 % 5.3 % 1.66 FOLD Eastleigh 1.1 % 3.3 % 3.01 FOLD 0.7 % 3.0 % 2.86 FOLD Gigiri 2.7 % 5.0 % 2.73 FOLD 0.9 % 4.8 % 1.97 FOLD Karen 1.7 % 5.0 % 3.26 FOLD 1.3 % 1.89 FOLD Kileleshwa 0.3 % 1.3 % 2.71 FOLD 0.3 % 0.8 % 2.28 FOLD Kilimani 0.4 % 4.2 % 2.48 FOLD 0.5 % 0.9 % 1.87 FOLD Kitisuru 0.8 % 1.1 % 2.80 FOLD 2.7 % 5.7 % 2.61 FOLD Langata 0.4 % 5.7 % 4.33 FOLD 1.0 % 2.2 % 1.65 FOLD Lavington 2.5 % 1.9 % 2.75 FOLD 1.2 % 2.0 % 2.65 FOLD Loresho 1.8 % 8.0 % 2.36 FOLD 0.7 % 4.5 % 2.30 FOLD Muthaiga 0.6 % 3.0 % 2.18 FOLD 0.8 % 4.8 % 2.61 FOLD Nyari 0.7 % 1.4 % 2.42 FOLD 0.7 % 3.3 % 1.72 FOLD Ridgeways 0.7 % 2.1 % 2.38 FOLD 0.4 % 0.0 % 2.17 FOLD Runda 1.3 % 0.9 % 3.04 FOLD 1.3 % 2.3 % 1.81 FOLD Spring Valley 1.3 % 4.2 % 2.31 FOLD 2.2 % 3.9 % 1.76 FOLD Westlands 1.5 % 7.3 % 2.91 FOLD 0.7 % 3.05 FOLD Apartment Price Trends By Suburb Nairobi Nairobi Suburbs Property Index Apartments Kileleshwa 4.0 % 2.54 FOLD 1.9 % 5.6 % 1.80 FOLD Kilimani 2.3 % 7.6 % 2.48 FOLD 8.4% 1.59 FOLD Langata 0.7 % 1.1 % 2.41 FOLD 3.7 % 5.2 % 1.82 FOLD Lavington 1.0 % 2.0 % 2.51 FOLD 10.9 % 1.62 FOLD Parklands 1.7 % 6.5 % 3.07 FOLD 3.6 % 7.2 % 2.20 FOLD Upperhill 0.6 % 2.91 FOLD 0.0 % 12.5 % 2.83 FOLD Westlands 2.0 % 5.6 % 2.72 FOLD 3.1 % 4.8 % 1.74 FOLD

4 House Price Trends By Town in Nairobi s Satellite Areas Nairobi Satellite Property Index All houses Athi River 1.2 % 5.6 % 2.92 FOLD 0.4 % 5.3 % 1.50 FOLD Juja 1.6 % 2.9 % 2.60 FOLD 0.6 % 0.8 % 2.79 FOLD Kiambu 2.0 % 4.5 % 2.55 FOLD 0.9 % 3.9 % 1.93 FOLD Kiserian 0.6 % 1.3 % 2.48 FOLD 0.5 % 5.6 % 2.27 FOLD Kitengela 2.4 % 8.8 % 2.77 FOLD 3.1 % 0.8 % 1.84 FOLD Limuru 0.5 % 11.6 % 2.77 FOLD 4.4 % 13.3 % 2.42 FOLD Ngong 5.8 % 15.6 % 2.74 FOLD 2.9 % 5.5 % 2.53 FOLD Ongata Rongai 1.6 % 2.5 % 2.65 FOLD 2.9% 2.3 % 2.18 FOLD Ruiru 1.2 % 5.8 % 3.25 FOLD 1.3 % 7.8 % 2.36 FOLD Tigoni 3.6 % 11.7 % 2.28 FOLD 4.8 % 11.6 % 2.03 FOLD Apartment Price Trends By Town in Nairobi s Satellite Areas Nairobi Satellite Property Index Apartments Athi River 1.1 % 2.8 % 1.92 FOLD 1.9 % 10.9 % 1.30 FOLD Kiambu 1.7 % 6.4 % 2.55 FOLD 1.4 % 1.5% 2.33 FOLD Kitengela 0.9 % 2.1 % 1.87 FOLD 2.3 % 2.1 % 2.06 FOLD Mlolongo 0.6 % 3.4 % 1.66 FOLD 2.7 % 5.4 % 2.16 FOLD Ngong 6.9 % 11.0 % 2.60 FOLD 1.2 % 4.1 % 1.78 FOLD Ongata Rongai 1.8 % 5.4 % 2.02 FOLD 2.0 % 2.5 % 1.96 FOLD Ruaka 0.2 % 0.0 % 1.89 FOLD 3.9 % 11.5 % 2.34 FOLD Syokimau 1.8 % 1.3 % 1.88 FOLD 0.8 % 1.5 % 1.94 FOLD Thika 1.0 % 8.1 % 1.70 FOLD 3.5 % 3.2 % 1.89 FOLD

5 Index 2000 = The Hass Sales Index The Hass Sales Index Q2 The Hass Composite Sales Index is representative of all properties for sale in Kenya Property values have increased by 4.46 times since The index shows a property price rise of 1.0% in the last month, rise of 3.6% in the last quarter and a 5.6% rise in the last year. Average The annual average is representative of the average price of all properties offered for sale in Kenya. Asking Price KSH.s 1000s 55,000 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 Q2 The average value for a property has gone from 7.1 million in December 2000 to 31.9 million in June. The average value for a 46 bedroom property is currently 42.1 million. The average value for a 13 bedroom property is currently 14.3 million. 1 to 3 Beds Mix Adj 4 to 6 Beds 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Mix by Year Apartments (13) Semidetached (13) Detached (13) Apartments (46) Semidetached (46) Detached (46) 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, semidetached took up 24.5% of the market and detached houses took up 52% of the market. In December 2017 however, Apartments took up 48.7% of the market, Semidetached Houses took up 24.9% of the market and Detached Houses took up 26.4% of the market

6 Index 2000 = The Hass Rental Index Q2 The Hass Composite Letting Index is representative of all properties for rental in Kenya Rents have increased by 3.80 fold since 2001 The index shows a property rise of 0.8% in the last month, rise of 3.3% in the last quarter and have risen by 2.8% in the last year. Rental Price KSH.s 1000s Average Q2 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. 146,499 in June. The average rent for a 46 bedroom property is currently Kshs. 232,219 The average rent for a 13 bedroom property is currently Kshs. 71,649 1 to 3 Beds Mix Adj 4 to 6 Beds 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Mix by Year Apartments (13) Semidetached (13) Detached (13) Apartments (46) Semidetached (46) Detached (46) 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, Semidetached Houses took up 20.5% of the market and Detached Houses took up 34.2% of the market. In December 2017 however, Apartments took up 63.4% of the market, Semidetached Houses took up 18.1% of the market and Detached Houses took up 18.5% of the market