Real estate depressed as investors hold back, waiting for elections to pass

The forthcoming General Election has depressed the real estate sector, with investors  have adopted a wait-and-see attitude after experiencing flare-ups that disrupted business in 2007/2008.

A survey by integrated real estate services provider Ark Consultants shows that most local and foreign investors are waiting for the August 8 General Election to pass before making a move. It notes that investment cycles tend to start after a general election and end with the next general election. The slowdown in uptake, drop in prices and the increasing number of vacancies are tell-tale signs that the market is adopting a wait-and-see attitude

Ark Consultants Commercial Services Director Reginald Okumu said the challenges to the residential and commercial sub-sector are further compounded by the government’s move to introduce capital gains tax (CGT) on rental income.

He said while the housing deficit had elicited an insatiable demand among investors, CGT demands have seen many home owners hike rents, forcing tenants to stay away, depressing growth in the two sub-sectors.