Kenya: New Housing Index Out As Nairobi Property Market Slows

The bankers’ lobby group will today unveil a housing price index, promising to give the property market a tool to analyse factors that inform price movements.

The Kenya Bankers’ Association first announced the index last September. The lobby says the index will track changes in overall prices and property specifications.

KBA hopes the index will form a key source of information for policy makers moving forward.

“The KBA Housing Price Index will supplement the consumer price index and private sector credit data on which the Central Bank relies to formulate its monetary policy,” KBA said in a press invite yesterday.

Presently, only HassConsult, a real estate services company, publishes a regular property index every three months.

The new index comes as fresh data from the Kenya National Bureau of Statistics show a possible slowdown in Nairobi’s property market, with the total value of building plans having declined in the first 11 months of 2014.

Nairobi county’s planning compliance and enforcement department approved building plans worth Sh204.31 billion, a 4.1 per cent decline from Sh212.99 billion in a similar period in 2013.

The decline was mainly in non-residential building plans – offices, retail, commercial and industrial properties. This was down by Sh10.74 billion to Sh84.47 billion by the end of November.

Residential plans’ value totalled Sh119.83 billion, a 1.7 per cent increase over the Sh117.79 billion approved in a corresponding period in 2013.

Generally, the value of residential plans has been rising faster in latter years owing to the huge deficit in housing – for sale and rental. The gap has seen rents and asking prices for houses soar in Nairobi.