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Latest data has suggested that the impending repeal of the banking interest rate cap has seen the Banking Rate Cap Repealappetite in the land value go up.
Hass Consult’s Property
Index suggests that there was a slight increase in land value in quarter 3 of
“Land prices slightly rise
over the quarter as the market awaits on the repealing of the interest rate cap
following President Uhuru Kenyatta recommending that Parliament amends the
Banking Act,” the report said.
It added that “Repealing of the rate cap is expected to result in banks increasing lending to the private sector which will spur the general economy. Developers and mortgage borrowers expected to benefit from increased lending by a commercial bank.”
Hssanali the head of research and marketing at HassConsult said that the lack
of liquidity has affected the real estate sector.
“We have seen access to credit by developers and buyers become difficult as commercial banks have become conservative at lending but we expect this to change should interest rates become market-driven,” said Hassanali.
She added that real estate
projects tend to be long-term (more than three years) and as such when loans
are shortened many potential borrowers, be they developers or mortgage
borrowers, tend to be locked out of the credit market.
Other factors that are affecting the land prices especially in suburban areas in Nairobi include the completion of roads. “Kitisuru and Loresho suburbs continue to benefit following the completion of the Waiyaki Way-Red Hill link road which has made the two suburbs more accessible,” the report said.
Oversupply in regions like Westlands has seen the dip for the demand for land and property. Westland had fallen to a two year low due to an oversupply of commercial offices and high vacancy rates.
The overall growth of land in and about Nairobi grew by 0.22 per cent for the suburbs and 1.44 per cent for satellite towns.
Feature Image Courtesy: Wikipedia
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