The increase in average prices of houses slowed down in the second quarter of 2015 due to uncertainty regarding interest rates.
This is according to the Kenya Bankers Association Housing Price Index (KBA-HPI), which marginally increased by 0.2 per cent in the second quarter of 2015 compared to 2.75 per cent recorded in the first quarter of the year.
“The softening signals stabilisation of overall house prices in line with the demand-supply dynamics that were influenced by the effects of a slowdown of economic growth and emerging macroeconomic instability,” said the KBA-HPI report.
Following recent volatility of the Shilling’s exchange rate against the dollar, the subsequent tightening of monetary policy has apparently influenced the decision making of households seeking mortgages towards home acquisition, the KBA-HPI indicates.
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Other factors that determined the average prices of houses were access to social amenities, location of the houses and the size of land where the units have been developed.