Landlords in up market estates are counting losses as impacts of the Covid-19 pandemic continues to ravage the country, affecting earnings from rent payments.
According Hass Consult Property Index, rent income from lavish estates as Spring Valley, Loresho, Runda, Kitisuru and Lavington have marginally gone down in the first quarter of 2020, with experts warningthat the worst is yet to come.
“Property market began showing signs of resilience as confidence trickled in, the Covid-19 pandemic which was first locally recorded in early March, will have an effect going forward,” said Sakina Hassanali, Head of Research and Marketing at Hass Consult.
She stated that the impacts of thepandemic will felt in the second quarter. “Globally, the pandemic has caused markets, across all asset classes to perform poorly but the extent of this effect on our local market will depend on how we manage the Covid-19 pandemic.”
In april the National Treasury ruled out suggestions that would compell the government to waive rental payments for tenants whose income has been severely affected by the pandemic. Rental earnings in Kitisuru fell sharpest by 7.7% last year, Loresho by 7.3% Spring Valley 6.5% and Lavington by 3.4%. But landlords in Gigiri, Kilimani, Langata and Rigeways have recorded a marginal increase in rental yields.
Land prices have also gone down in suburbs and satellite towns in the first quarter of 2020, sustaining the decline recorded in previous quarters with Gigiri, Kilimani, Langata and Upper Hill reporting a decline of between 1.6 and 2.8 % in the first quarter of 2020.
Hassanali said in that in her opinion landlords and agents will be forced to offer rent discounts and freezes if the stay-at-home orders that have slowed the economy are maintained.
But despite the challenges brought by the pandemic, if the situation is managed well the economy will gradually pick and recover. The COVID-19 pandemic has left many landowners with unexpectedly limited liquidity which may result to a bigger supply in land in post covid-19 times.