Construction and property industry significantly slowed down by Covid-19
- With the stay at home measures in force, property viewing in the country is not happening as usual; and for the few who really have to make site visits, caution is a must.
- Experts now say that the sector has suffered a great deal from the Covid-19 pandemic with Knight Frank now saying they’ve switched to virtual viewing to lure buyers.
As the Covid-19 pandemic continues to ravage various economic sectors, Kenya’s property market hasn’t been spared either.
In the wake of job cuts and salary reductions, activities in the real estate sector have drastically slowed down; this has forced developers and agents to adapt.
With the stay at home measures in force, property viewing in the country is not happening as usual; and for the few who really have to make site visits, caution is a must.
Experts now say that the sector has suffered a great deal from the Covid-19 pandemic with Knight Frank now saying they’ve switched to virtual viewing to lure buyers.
“What has happened in the residential sector is that…the buying activity has collapsed, nobody is buying property at the moment,” said Knight Frank MD Ben Woodhams.
“We’ve seen a lot of social media activities…people sitting at home looking at houses. Lots of activities online, but the actual transactions are down.”
This has been credited to the fact that many prospective buyers have suffered from salary reductions and even job losses.
Given the wait-and-see approach being adapted by many potential buyers, transaction levels are expected to fall even more, with businesses being advised to innovate to remain afloat.
At Tatu City, this has been a wake-up call; they have had adopt an approach of reducing the work force without stopping the work.
“One of the things we have done is that we are encouraging self-drive tours. You come to site, you are safely in your vehicle and you follow me. Workers are being screened and they sanitize every so often,” said Tatu City Residential Sales Manager Beatrice Njeri.
“While we could notice there has been a slowdown in the provision of infrastructure in other developments, for us its reawakened our need to ensure we have provided the necessary infrastructure to enable people to build.”
A similar effect is being felt across the retail and commercial property sectors as the foot traffic in most malls is said to have dropped by more than half to 40 percent since the first coronavirus case was reported in Kenya.
In its recent market outlook report, property manager Knight Frank says it expects a significant slowdown in office space take up in quarter 2 of 2020 due to the Covid 19 disruptions.
So has this situation affected property prices?
“What we have actually seen are rental discounts and reductions of 30 percent and above. But for price offers we haven’t seen, not to mean that there isn’t any developer giving price offers,” said Cytonn Real Estate Analyst Wacu Mbugua.
A real estate agent intimates that the asking price for particular 3 bedroom house plus a servant quarter in Kilimani has reduced by Ksh.3 million to Ksh.19 million.
A townhouse located in Lavington is now going for Ksh.50 million from Ksh.60 million a while back, while a Ksh.16.5 million apartment in Kilimani is now asking for Ksh.14 million.
Billionaire Warren Buffet once said it is wise for an investor to be fearful when others are greedy and greedy when they are fearful. And despite the toll that the coronavirus is having on the property market, experts say it may just be the right time to invest for those with financial muscle.
“For those lucky ones with money, this is the best time to buy a property because the buyers have the bargaining power. Any business right now is desperate to make any income they can,” added Ms. Mbugua.
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