The growth of the real estate sector in Kenya has slowed down in the past three months mainly due to the prolonged electioneering period and a credit crunch.
According to reports from the Kenya National Bureau of Statistics (KNBS) the construction sector which is a major driver of economic growth in recent years, expanded by 4.9% in July-September compared with 7.8% a year earlier.
“The slowed growth in the sector was partly attributed to the extended electioneering period that prompted investors to scale down construction activities,” KNBS said in the third quarter gross domestic product (GDP) report.
The reports further revealed that this was the slowest growth experienced in the sector since 2011. The slowdown in the property sector is equally reflected in other related industries like the cement, timber and metal markets. Cement consumption dropped by 13.09% to 1,408,566 metric tonnes in the three months to September compared with the same period the year before.
Kenya’s fastest growing sector
Housing has been one of Kenya’s fastest growing sectors in the past decade, with returns from real estate outpacing equities and government securities.
Additionally, the report expounded and said that the sluggish growth in construction activities also affected the importation of iron and steel products. These are key materials in the sector whose volumes dipped by 66.1% and 37.9%, respectively.
While land is seen holding its value for now, housing units that were previously snapped up even before the ground was broken are now struggling to find buyers. The impact was manifested in the poor performance of publicly traded cement firms.