We are in Week 8 of 2021, and below are factors that will shape the Real Estate and Development Market in the next one week:
i.) Rising Cost of Construction Materials
A comparison research survey of construction materials and building rates in 2020 and 2021 building rates show that overall, construction costs in Kenya have increased by 0.3% in some areas to as much as 4.29% in other areas. One of the main reason to this increase is the pressure on the Kenya shilling against major international currency. Consequently, it now costs more to import even basic construction materials and fittings.
The increase in the cost of construction material is expected to impact the cost of construction negatively. Consequently, the high cost of construction is expected to increase the sale or rent price.
ii.) Resurgent of Covid 19 Cases
As of Sunday 22nd February, 2021, Kenya reported 28 deaths in the last one week as a result of covid 19 related cases, and a positivity rate of 6.2%. This shows a resurgent and spike of covid 19 cases, after weeks of containment measures that resulted in low positivity rate until now.
The resurgent of Covid 19 cases is expected to be a blow to the hospitality industry (Hotels, restaurants, country homes and serviced apartments), which majorly relies on social gatherings and meetings. This development is also expected to inhibit global tourist arrival in to the country, reducing the bed occupancy rates as well as occupancy rate for commercial building as more companies may opt to continue working from home instead of taking office space.