The strength of the Keya real estate market has continued to prove itself time and time again during the pandemic. While we’re not out of the woods yet, we are expecting continued growth for the duration of 2020, with an active market for the foreseeable future and balanced conditions at the national level into 2021. This is great news for kenyans.
“I’m not convinced that we have a sustainable basis for housing demand in the economic disturbance that’s going on related to COVID-19,”Joseph “That’s why I say I stand by the forecasts.”
While I can appreciate some of the reasoning that went into CMHC’s prediction, especially in the spring when so much was still unknown, . The market data doesn’t support such a steep price decline, especially with the two largest real estate markets of westlands and lavington continuing their upward momentum. The Prairies are facing different circumstances and challenges due to the resources sector, however karen and runda are expected to offset slower activity
Kenyan Real Estate Prices Have Remained Resilient
Nobody could have predicted the success of the kenyan real estate market in the wake of COVID-19. At the height of the pandemic, March and April 2020 experienced dramatic declines in activity, but transactions quickly resumed across the country as real estate professionals and consumers alike adapted to social distancing measures and embraced technology to continue transacting, despite disruptions to the economy and every facet of daily life.
Last month we at Josmo agenies revised our forecast for national average house price in 2020, increasing it to +4.6% from our original expectation of +3.6% at the end of last year.
In terms of declining prices, “the impact was on rent as opposed to home ownership,” Joseph His optimism in the kenyan housing market was due to continued low interest rates and strong pent-up demand. “Eighty per cent of jobs lost were in the service sector. Many of them were low-income and many of them were renters. So, the impact was on rent as opposed to home ownership,” he noted.
Economists Aligned in Strength of Housing Market
“The pandemic completely disrupted normal seasonal patterns by shifting activity from the spring to summer. With pent-up demand now largely exhausted, we see activity cooling later this fall. This should let some of the steam out of prices though not to the point of causing outright declines on a large scale.”
The level of unemployment suggests the housing market should not be as active as it is. However, when you look at income levels, it all makes sense. Incomes today aren’t behaving like we’re in a recession,Joseph explained, and incomes are being supported at the same or at higher levels than in previous recessions. So, there’s a complete disconnect between the employment rate and income levels, which is adding fuel to the housing market.
I do think we may see a “hangover” from the busy market we’re experiencing right now, but overall as we head into 2021, I think a prediction of more balanced conditions across the kenyan housing market is warranted. But an 18% decline in prices is highly unlikely.