Coast real estate prices hit the path to recovery

Property dealers at the Coast say 2014 has been the worst year for the property market, which had experienced a boom in the past five years.

Riots, insecurity and religious violence in the region dealt a blow on the sector, with some companies reporting zero sales during the year.

“Since the market relies heavily on buyers from Nairobi and the diaspora, the news of insecurity impacted negatively on sales,” said Mr Joshua Ngunze, the property manager at Datoo Kithikii Real Estate Ltd. “In our case, we had enquiries but no major sale.”

Compared to last year when inquiries and sales were 65 per cent on average, this year recorded 30 per cent enquiries for Mr Ngunze’s company.

Further, several business premises and residential houses in places such as Majengo, which was the epicentre of chaos, remained without tenants for much of the year. 

Despite the low sales in 2014, the past two months have shown signs of improvement.

New constructions are coming up in Tudor estate, Bamburi and Utange, where investors have built flats for sale and rent, projecting a better 2015.

Investors have put up flats, bungalows and shopping malls in these areas, driven by a high local demand for housing as a result of a growing middle class.

Recently, Nakumatt Supermarket opened a store at Bamburi, while Naivas announced it would open one some 300 metres from the Nakumatt outlet.

The last two months have seen some activity in the sector, according to Myspace Properties chief executive officer Mwenda Thuranira.

For instance, sales for the Nyali View Apartments in Bombolulu, which is under construction, have been on the rise.

The housing project, which is scheduled for completion in September 2016, comprises three-bedroom and two-bedroom units.

The price per unit ranges between Sh7 million and Sh8 million.

“We have done better in November and December, where at least 30 of the 144 units have been sold,” Mr Thuranira said.

“Despite the insecurity experienced this year, investors know that the situation will not remain that way for long.

“There are hopes that things will improve in 2015, so people are upbeat and are making enquiries we highly expect will result to sales,” he added.

Mr Thuranira expressed concern that the effects of insecurity had been worsened by ineffective response to negative publicity from attacks in the region.

The industrial and commercial property market recorded sales, despite the insecurity.

“A number of companies bought properties in Kikambala, Kaloleni, and Vipingo areas for the purpose of setting up offices there,” said Mr Paul Kinoti, an estate agent at Coral Properties.