by Ronald Njoroge
NAIROBI (Xinhua) -- Kenya’s current
political impasse and interest rate caps have lowered the growth
rate of house prices, bankers said in a report released on
According to the Kenya Bankers Association (KBA)
- Housing Price Index (KBA-HPI), there was a 0.42-percent
increase overall in house prices in the third quarter of 2017,
down from 0.98 percent in the previous quarter.
"Overall, house prices in Kenya for the third quarter of 2017
posted the lowest rate of growth registered in the last three
years, on the backdrop of the current political environment and
slowed private sector credit," the report shows.
"This is an indication that there is no relief for the
declining trend in the rate of house prices increase since the
third quarter of 2015," it said.
KBA Director of Research and Policy Jared Osoro said that the
trend on the growth in house prices mirrors that of credit
growth to the private sector.
"Credit growth has slowed down in 2017 as a result of the
introduction of the interest rate capping law which has further
worsened the already declining credit to private sector prior to
its introduction and thus discouraged banks from lending to the
private sector," Osoro said.
He added that the generally depressed demand in the economy
and the slowdown in credit expansion has reduced the numbers of
households that can rely on the credit market for home
According to Osoro, the political environment seems to be
affecting both sides of the market.
"On the demand side, potential home buyers seem to be holding
back on decisions to invest in home ownership while on the
supply side, investors in real estate could also be on a
wait-and-see mode," he said.