Apartments leading the pack in demand

Developers are now leaning towards building highrise residential buildings as opposed to standalone houses as rising demand has reflected greater returns in terms of sales and investments

Daniel Ojijo, founder and organiser of the Kenyan Homes Expo, says demand for apartments has doubled in the last three months, with foreigners, especially expatriates and locals, driving sales.

“Currently, buyers seem to prefer spending an average of Sh20 million for a luxury three to four bedroom apartment, rather than spending double the price for a standalone or townhouse located within sprawling estates,” says Mr Ojijo.

Industry reports indicate that in 2013, apartments have taken up 40.1 per cent of the market, with townhouses attracting 26.5 per cent while standalone houses are at 33.4 per cent of the market share.

The HassConsult property Index indicated that in June 2013, apartments in both duplexes and triplexes had their values increased by 2.39 times since 2001. This is a 1.7 per cent rise from January to April 2013, and 6.6 per cent rise in the last year. The average price for an apartment is currently at Sh12.5 million, up from Sh5.2 million in December 2000, according to the HassConsult.

“Those buying for investment prefer apartments sold off-plan compared to those already constructed as the former are selling at more than 50 per cent or higher upon completion,” he adds.

Mr Ojijo says new developers have learnt this trick, hence are leaning towards development of high-rise apartments as opposed to the development of standalone houses as they are getting double returns from apartments.

For instance, apartments coming up in Mlolongo, off Mombasa Road, have sold an average of 30 units in the last three months, for a price range of between Sh4.5 and Sh5.5 million shillings for two- and three-bedroom units respectively.

Another project, of two- and three-bedroom luxury apartments on Chaka Road, near Yaya Centre, has only three units remaining out of sixty units, even after the developer raised the sale price from Sh25million in February this year to Sh30 million. Fifty per cent of all these sales have been in the last three months, he says.

BLUE TRIANGLE KENYA HOMES EXPO

Buyers, developers and related industry players in Kenya’s property sector will be coming together, for the second time this year, between November 11 and 17, for the 18th edition of the Blue Triangle Kenya Homes Expo, to among others discuss and showcase such sector trends and lay down bubble burst fears, says Ojijo.

“The theme for the 18th edition is ‘redefining your living,’ illustrating the aim of bringing new ways of real estate purchase by providing an unrivalled environment for clients to meet with exhibitors who will guide them on a comfortable ride to home ownership,” says Maureen Ojijo, the Marketing Director, Homes Kenya Limited.

“The 18th edition will be an exciting one for stakeholders following interesting market revelations, where among others, demand for apartments between May and August 2013 has more than doubled,” she adds.

“We expect developers and buyers to interact and share some of these prevailing market ideas, come up with more targeted projects, promote real estate buying, financing and development consulting and generally keeping the industry activity at an all-time high.”

With the 17th edition having attracted a record number of 40,000 visitors and 150 exhibitors, the organisers are taking up more space at Kenyatta International Convention Centre to meet increased demand for stalls.

The exhibitors will include a collection of local and international service providers and sellers drawn from the financial sector, insurers, energy suppliers, residential and commercial property developers, industry associations and government bodies, property valuers, constructors, development consultants, entertainment, interior decorators, travel, leisure and more.