House prices drop as oversupply hits market

Investors in several neighbourhoods in Nairobi are reeling from a slump in home prices and rent as excess supply bites.

Selling prices in Kilimani have dropped more than 5 per cent since last June to lead in the slump that has also been witnessed in Donholm, Eastleigh and Ridgeways, according to findings presented by real estate consultancy HassConsult. A dip in prices is a reflection of slowing demand, further compounding concerns that developers who borrowed to fund for-sale projects could be coming under distress. Rental prices in the high-end Westlands district are down 3.4 per cent, while Karen is reported as the best-performing estate for landlords. “We have seen oversupply in these areas,” head of the research Sakina Hassanali said yesterday, referring to the middle-income neighbourhoods that have been worst hit. The supply of three-bedroom apartments has stayed ahead of demand, translating to low occupancy levels.
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