Kenya’s Real Estate market crossed into 2021 with a mixed sense of anticipation following the panic and disruption occasioned by the coronavirus pandemic of 2019.
From the current hardships being faced by most tenants, it is still hard to estimate what to expect moving forward. However, key players are eager to see what shape the sector will take after the disruptions caused by the pandemic.
The sector saw a 68% decline last year in office absorption when the pandemic was reported. With new regulations, some companies opted to run their offices via virtual space, which led analysts to foresee a further decline in demand through 2021.
Leisure, hospitality, commercial, retail, and travel sectors have not been left behind. The health ministry’s safety measures, including lockdowns, curfews, and social distance, saw these sectors greatly affected throughout the year. The impact is still loud up to date.
A new study by a market research firm, Consumer Insights, has revealed that the country’s coronavirus pandemic has dramatically affected its workforce, with pay cuts and job losses being the norm.
As the condition keeps on worsening, many tenants are struggling to pay rent. In extreme cases, some have relocated upcountry. And there is a growing trend of tenants and landlords talking to settle on friendly payment terms.
Other tenants and business owners are negotiating with landlords so to survive. The trend is expected to persist through 2021 or until the situation stabilizes.
Generally, several Kenyans cannot meet their rental obligations due to diminishing income and job layoffs. The government has a task to inject more cash into the sector to help it pull through.
The nationwide housing deficit projections tentatively stand at 200,000 units annually and an accrued deficit of more than two million units.
According to a survey done last year by the Kenya National Bureau of Statistics, six had lost their income source to the pandemic for every ten families. Unfortunately, the second lockdown introduced in March 2021 has added salt into the wound.
The state of uncertainty might persist through 2021’s first quarter as the government seeks to jumpstart the economy. Transaction levels are expected to fall drastically because of the wait-and-see attitude being adopted by prospective buyers and investors.
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