Real estate activities are yet to pick up in Kisumu town after suffering in a big way from the political instability that characterised the last year’s elections period.
However, property and real estate dealers in the lakeside city are optimistic that the sector will bounce back to business and record notable growth later this year after experiencing a slowdown caused by the political tensions and demonstrations, especially during the countdown to the repeat presidential elections. According to players in the industry, many investors who postponed construction due to the political uncertainties are yet to re-embark on them.
Kisumu’s Michigen Investment Company Limited director George Nyagowa says activities in the sector remained slow last month even as they remain positive things will take shape later this year. “Currently, there is still a go-slow in the sector with minimal new developments coming up.
Investors are still coming to terms with the impact of last year’s high political temperatures and banks are also shying off from giving loans to developers,” he said. Nyagowa said due to a sluggish economy, most banks do not want to risk in giving out loans to prospective developers and this has further slowed down activities in the industry,” says Nyagowa.
Activities such as property management are also significantly affected as tenants are struggling to pay house rent. Property dealers in Kisumu are now being forced to dispose of some of their properties to get capital so that they can kick-start new developments as the year takes off.
“However, we anticipate property market could start booming around mid-year, which could be an opportunity for developers to rebuild on what they lost as a result of the political tensions,” adds Nyagowa. Fatia Asmin, a sales representative at Lake Estate Agency, says business is picking up slowly.
“The sector is dwindling within Kisumu town, but with high expectations that business will boom later this year when many buyers who kept off the market jet back with new investment plans,” she said.
“We hope 2018 is going to open a new chapter for business to thrive again in the real estate sector after experiencing tough times in 2017,” Asmin added. Skylark Construction Limited Company director Vinod Patel says there have been minimal new development projects and few tenders coming up in since last year’s electioneering.
The situation has contributed to a huge decline in construction activities that has resulted in low demand for construction and building materials, leaving contractors and the sector workers jobless.
Patel says they anticipate proper circulation of money from the newly-inaugurated county government could spur real estate business. “We hope for good tidings about three to four months to come when things fully stabilise after the election fevers,” said Patel.
“Developers are slowly shifting from the wait-and-see attitude,” he added. At the same time, he points out that the slowdown in the construction industry has also been necessitated by capping of banks interest rates whereby small business proprietors now fear going for bank loans.
According to Patel, capping law on bank interest rates has generally affected activities as contractors cannot effectively borrow money from the financial institutions to undertake key projects.
“The introduction of capping is a big blow to small- and middle-class borrowers where there is a lot of spending power and this has put our economy under intense pressure,” he said.