As we get closer to the elections later this year, decrease in the demand for property becomes a phenomenon compared to any other period. Many people fear about the security of the property especially in regard to what was experienced after the last election.
However, this can be the best time to own a home in Kenya as the prices have stagnated or in some instances gone down as people adopt a wait-and-see attitude. Right now until after the election presents an incredible buying opportunity for anyone who wants to be a home owner as buyers sit on the sidelines for many reasons, one of which is the impending elections.
So if you are an active buyer, you won’t have much competition until well into the beginning of next year. However, there are a few things that are worth factoring as you look for your property.
First, with regard to the impending election, you’ll generally see market activity slow down before an election. Considering we are entering a period during the annual real estate cycle where inventory is at its peak, you have more flexibility when it comes to making an offer.
Meanwhile, there are many homes on the market right now… and if you’re among the few people giving offers, you have the opportunity to under-bid the market. Many self-financing sellers won’t come down on their price because they can afford to wait, which is one reason most property prices haven’t dropped like other parts of the country, but there will be some motivated and/or distressed property sellers… so get out there… learn “your market”, and pounce when you know you’ve found a great home at a great price.
First look at what you really want to buy. Everyone needs to live somewhere and if you can afford to buy at this time and have found the home you want and plan on being there for more than five years, do not fret. The prices are low, the inventory is high, the mortgage rates are favourable and owning a home is still one of the best investments.
Don’t time the market! If you have been itching to own for months/years, and you have found the right place, at the right price, that you can live in for 7-10 years, then buy it. Short-term volatility will shake out in the long-term, meanwhile, you will be living in the house you always wanted.
If you have to stretch to buy it, don’t like the location or property that much, or are just buying for “investment” purposes, then don’t buy it. If you are betting on selling the property in 4-5 years, then you should wait and see how this market is going to shape out.You don’t want to be stuck in a home that is worth Sh80,000 less than you paid for it 4 years from now.
As a buyer, you have more leverage right now in the Kenyan real estate market than has been the case in a very long time – prices have been falling and properties have been staying on the market for much longer than ever before. And with the current credit market tightness, sellers and listing brokers are much more concerned about whether or not the potential buyer can get financing and close the deal.
Interest rates are also a huge part of the picture as to whether it’s a good time to buy or not. Although we are above the ridiculous lows of the early 2000s, rates are still good right now though they were very high some months ago.If you are able to get a loan right now, that gives you a lot of leverage you won’t have when the credit markets ease up.
What you should do is get a recent approval letter from a lender, go looking for a place, and if you find the place that’s right for you, make sure you have a broker that is a good negotiator and knows the market well.There are lots of disreputable mortgage brokers out there who will tell you no problem getting a loan, only for you to discover mid-transaction that they can’t deliver on their promise.
Since we’re seeing more buyers awaiting the results of the election, this phenomenon could be exacerbated. This represents an opportunity for active buyers since sellers have to become more flexible in order to sell. Right now, the uncertainty in the stock market, in the lending markets, in the general economy and in politics is causing panic and paralysis. It is typical of times of confusion. But the bottom line is that people need to live somewhere and they need property developers and agents to get them there.
Be positive no matter what the market predicts. It is how you adapt to the volatile market that will either make you or break you. But keep in mind that this is a great time to buy.