Property market in Mombasa has been hit hard by tourism’s collapse and the violence, triggering speculative buying especially of plots.
The market has slowed down and prices fallen sharply, but land investors are still buying, according to Vipingo Holiday Homes director Malusha Majani.
An eighth of an acre on Links road in Nyali, one of the areas where land prices had skyrocketed over the past three years due to increased demand, is going for Sh6 million, down from Sh10 million a year ago.
A quarter of an acre at Vipingo that was selling for Sh3.5 million is now going for Sh2 million, he said.
“We have been forced to reduce the prices of our four-bedroom houses at Vipingo to Sh30 million from the initial starting price of Sh35 million and are experiencing low inquiries because people are in a state of panic,” he said.
Mr Majani said property deals have gone down by at least 50 per cent compared to last year.
“But those in the business of land buying and selling are excited. They are aware that people fear taking risks and will shun these areas, but they also know the situation will not remain volatile forever,” he added.
The coast region has been hit by violence over the past one month, leaving about 100 people dead, with Lamu County being the most affected.
Other areas where deadly attacks have occurred include Kilifi and Mombasa counties.
According to Mr Majani, although attacks in Kilifi have dampened hopes of investors who were banking on the ongoing tarmacking of Mavueni-Kaloleni road to open up the area, land buyers are enjoying the low prices.
The prices have dropped from Sh2.5 million to an average of Sh1 million per acre in Kaloleni while the same plot that was going for Sh600,000 at Mavueni is now being sold for Sh200,000.
Despite the insecurity, mortgage lenders are still financing developers but most are holding the funding waiting for the situation to clear, according to Paul Kinoti, a consultant at Coral Property Ltd.
“We are also experiencing a situation where foreigners who own apartments in Nyali, Shanzu and Vipingo are eager to sell them due to the bad publicity out there…our local clients say clashes cannot stop them from buying and are striking good deals,” he said.
Rents have also been hit with landlords in Majengo witnessing exit of tenants from flats.
“Tenants are moving out but there are those who are not worried. We cannot run away from our homes so we are putting up with the situation,” said Idha Mbarak, a dealer in agricultural machinery who also owns rental houses and has lived in the area for decades.
Myspace Properties executive officer Mwenda Thuranira says, those working in the hotel industry are experiencing problems paying rent after losing their jobs due to closure of some hotels.