The real estate sector has recorded its slowest quarterly growth in four years, giving weight to recent property market reports that have showed a fall in demand despite increased supply of new housing units.
Fresh Kenya National Bureau of Statistics (KNBS) data, covering the third quarter ended September 2018, shows real estate recorded a growth of 5.8 per cent, the slowest since the 5.4 per cent registered in the fourth quarter of 2014.
The growth rate is way lower than the four-year peak of 9.6 per cent recorded in the first quarter of 2016.
Market analysts associated the sharp dip to uncertainties in approval laws, difficulty in accessing bank loans and a general slowdown in spending power among buyers.
Cytonn Investments senior manager for regional markets Johnson Denge said in an interview Wednesday that the market is experiencing subdued demand in the traditional drivers of real estate.
“Demand is both constrained by oversupply in some segments and also due to would-be-buyers experiencing very limited access to credit,” said Mr Denge.
“We have seen oversupply in areas such as office space, upper-limit residentials in select markets and also in retail space.
“Demand has slowed down and developers will have to look for new pockets of value, especially in the lower end of the market.”