The Dynamics of Kenya’s Residential Real Estate Market: Unpacking the KNBS Survey Findings

The Kenyan residential real estate market has long been a focal point for investors, developers, and potential homeowners. A recent survey by the Kenya National Bureau of Statistics (KNBS) sheds light on the varying durations properties remain on the market before being sold, offering insights into buyer preferences and market dynamics.

Understanding Off-Take Times

The term “off-take time” refers to the duration a property remains on the market from the moment it’s listed until it’s sold. According to the 2023/2024 KNBS real estate report, the average off-take time for residential properties in 2023 was 16 months. However, this average encompasses a broad spectrum of property types, each with its unique market behavior.

Apartments: The Slow Movers

The survey highlighted that apartments, particularly those with multiple bedrooms, tend to linger the longest on the market. Specifically, three-bedroom apartments have an average off-take time of 19 months, while two-bedroom variants follow closely at 18 months. This extended duration often compels sellers to reconsider and lower their initial asking prices to attract potential buyers.

Faster-Selling Properties

In contrast, certain property types experience brisker sales. Two-bedroom townhouses, for instance, boast an average off-take time of just six months, making them particularly appealing to buyers seeking swift transactions. Similarly, three-bedroom bungalows are typically sold within eight months. These shorter durations suggest a higher demand or better alignment with buyer preferences for these property types.

Impact of Prolonged Off-Take Times on Pricing

A notable observation from the KNBS report is the correlation between extended off-take times and reduced sale prices. Properties that remain unsold for 12 months or more often fetch prices lower than their initial listings. Interestingly, one- and two-bedroom apartments are exceptions to this trend, maintaining their value despite longer market durations.

Factors Influencing Buyer Preferences

Several elements influence the varying off-take times across property types:

1. Overpricing: Setting prices above market expectations can deter potential buyers, leading to prolonged listing periods.
2. Property Features: Amenities such as surveillance systems, ample parking, and backup generators enhance a property’s appeal. Maisonettes with domestic servant quarters also attract specific buyer segments.
3. Market Demand: The demand for specific property types fluctuates based on economic conditions, demographic shifts, and evolving lifestyle preferences.

Strategies to Mitigate Extended Off-Take Times

To address the challenges of prolonged off-take times, sellers and developers can consider:

• Accurate Pricing: Conducting thorough market research to set competitive and realistic prices.
• Enhancing Property Appeal: Investing in desirable amenities and ensuring properties are well-maintained.
• Offtake Agreements: Engaging in offtake agreements can help gauge demand before construction, allowing buyers to lock in prices and guarantee supply in anticipation of future needs.

Conclusion: Navigating the Real Estate Landscape

The KNBS survey underscores the importance of understanding market dynamics in Kenya’s residential real estate sector. For potential buyers, this data offers valuable insights into property types that align with their investment timelines and expectations. As the market continues to evolve, staying informed and adaptable remains crucial for all stakeholders.

Considering a property investment? Explore current listings to find a property that aligns with your preferences and investment goals.

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