We saw the lowest drop in site activity both from searches and expectedly in conversions when the government’s lockdown began in March 2020 after the announcement of the coronavirus in Kenya. With more people working from home, we have seen a significant increase in the people searching for property which has doubled in a span of 2-4 weeks.
Sale listings had more superior interest to our property seekers as shown below.
When we look further into the sale listings by category this is what the numbers show.
Houses and Land sale listings are what most of our site visitors are viewing. When it comes to specific locations for houses; Runda, Karen, Kitisuru, Kitengela, Thika Road and Kiambu Road top the list in that order. On the land side; Nanyuki, Gilgil, Kitengela, Ruiru, Nakuru and Kiambu are the most searched for in that order. Based on our analytics, most of these property seekers are from Nairobi and aged between 25-44.
Just as there was a shift from low to high demand during the lockdown, a similar effect was seen in supply. There has been a decline in market activity from the agents/developers front with a 30% – 60% drop in new listings volumes as shown below.
The drop in new listings has a direct correlation to the severity of the lockdown. This has been more adverse in Kenya especially since the counties with the major infrastructural, construction and real estate projects have been affected by the lockdown.
Since 13th March when we had our first COVID-19 case in Kenya. It is important to note that, for 2-3 weeks after we had a drop in new listings to as low as 62% weekly. However, these numbers have risen and doubled since then.
The most affected property listings categories are Commercial Property for rent and apartments for rent. With more people working from home, businesses are looking for ways to cut costs now that the office blocks are empty. When it comes to residential houses, people are scared of leaving their houses to even go view a property hence there is no need to move right now during the pandemic.
As we are all aware, the real estate sector is already in turmoil due to an oversupply in some segments and unfulfilled demand in others. With the pandemic, it has now become a central component where almost everything is on halt. Further to that, many tenants will not meet their rental obligations for the duration that COVID-19 persists. New developments will stall and the future of real estate will be challenged to its greatest point yet.
Once this passes, there will be many sellers/agents with stale properties, distress sales and a general oversupply. With everyone selling, the prices will have to drop, something that is already happening in the name of ‘one free month agreements, rent waivers’. It will be a buyer’s market.
Since the last election in 2017, the market has experienced a stalemate between buyers and sellers. The prices have continually skyrocketed while buyers hold on to their money, waiting for sellers to barge and drop their prices.
When, and if the prices go down, a window of opportunity will open for buyers. At the moment, this window has already started opening with sellers getting more and more desperate to make a sale in these COVID times. 2022 is an election year, and the minute campaigns peek, property transactions will slow down as we have historically seen from our data. 2021 should be the boom year for most buyers.