NAIROBI, July 26 (Xinhua) -- Kenya's property prices have experienced a 3.1 percent decrease in the second quarter as a result of oversupply, a report released on Wednesday reveals.
According to the Hass Property Index, the real estate sector has an oversupply due to its attractive returns.
"So the slight decrease in property prices is a form of price correction as the property market stabilizes," says the report that was conducted by HassConsult.
Since the beginning of the year, the property selling price has reduced by 2.2 percent as compared to 2016. However, property values have increased by 4.24 times, while rents have increased by 3.7 times since 2000.
The survey shows that in the past decade, the real estate sector has attracted huge investments due to a housing shortage.
However, these investments have resulted in a property glut especially in the high end market.
"The opportunities to buy properties and then sell them at a handsome return are becoming thinner as prices have become static over the last few years," notes the report.
The Hass Property Index says that investors are now shifting towards renting property as opposed to selling property.
HassConsult Head of Development Consulting and Research Sakina Hassanali said that there is increased interest in rental yields by investors as capital gains become harder to achieve.
"In fact, the real estate investors are giving rental yields a greater consideration as the marginal house price increases over the last few years, have reduce the opportunities to flip properties and reap large gains," Hassanali said.