Analysts suggested the rush by buy-to-let landlords, second home buyers to and buy land to speculate beat the rise in stamp duty had pushed prices up.
Kenya land price growth has picked up to hit an annual rate of 10.1%, a one and a half year high, but could ease in coming months according to the country’s biggest mortgage lender.
The price of an average 1/8th acre plot rose to Kshs. 500,000 in March, up 12.7% from the month before. Land prices in the three months to March were 2.9% higher than in the final quarter of 2015. The annual rate rose from 9.7% to 10.1%, the strongest since the three months to July 2014.
However, the next two months could see a lull, as Ndatani M.D. Mr. Alex Muema, explained: “Worsening sentiment regarding the prospects for the Kenya economy, falling banking industry and uncertainty ahead of the Kenyan general election in August, 2017 could result in some softening in the land market over the next couple of months.”
But in the long run, land prices are likely to push higher as demand continues to outstrip supply, experts say.
Alex noted: “Current market conditions remain very tight with an acute supply/demand imbalance continuing despite an improvement in the number of properties coming on to the market for sale in recent months. This, together with continuing low interest rates and a healthy labour market, indicate that land price growth is set to remain robust.”
Prices of flats have risen more sharply than prices for other property types since 2008, rising 57% compared with a 37% increase for all residential properties.
Concluding on the experts advice, this the time to invest in property.