For the last 25 years, property prices in Kenya have recorded a sharp growth, shaking off the impact of costly mortgages, a trend that industry experts are attributing to expanding middle class with disposable incomes and who are often buying houses in cash.

During the period under review, residential property prices in East Africa's crown jewel increased at the rate of 425 percent, dwarfing the uptick in asking cost for homes in the U.S. (201 percent), France (151 percent) and Singapore (122 percent).

"A critical factor in strength of Kenya's housing market has been its source of finance," revealed HassConsult co-CEO Sakina Hassanali during the release of International Investment Outperformance: The Kenyan Residential Property Market report.

She added: "Homes in Kenya are fully paid, which makes the market super resilient. Owners rarely end up grappling with mortgage repayments they can't meet, preventing the waves of forced sales suffered in other economies" covered in the survey.

The study reviewed eight global markets including the U.S., Canada, South Africa, France, Switzerland, Singapore and Australia, comparing their property prices and rental yields with Kenya's.

According to property market tracker HassConsult, Kenya has been experiencing increase in the number of high earning individuals over the last 25 years cutting across education, health, trade and agriculture sectors of the economy.

What's more, HassConsult said the steady rise in property prices is also powered by increase in "mortgage-financed banking staff" even though housing loans still command a small percentage of property ownership in the country.

"In Kenya, they [mortgages], they fund barely two percent, almost all our property is bought with cash. But that means it moves into full ownership, versus being effectively owned by the lender," explained Hassanali.

In comparison, the trend in the other markets under focus have seen property buyers suffer rise in mortgage rates due to uptick in inflation, further lowering the number of customers who can afford them. In Switzerland and Singapore for instance, housing loans constitute 90 percent and 80 percent respectively compared to Kenya's two percent.

Source: HassConsult Research

The study revealed that a significant number of property customers in the country go for "off plan developments", a strategy that sees them enjoy discounts and instalments, greatly easing the ownership burden.

"With offplan now the main point of entry for many Kenyans into property, the discounts and instalment payments are creating gains that are, in reality, over twice the norm in other global markets," explained HassConsult Development Sales Advisor, Ian Mutinda.

As for rental yields in the property market, the research established that the country's rising middle class has sustained a "fulsome flow of new renters at almost all levels, maintaining a remarkably steady rental yields."

"Kenyan professionals rarely pay out the top level rents, of almost KES250,000pm for detached houses, preferring to buy once they have that kind of money," explained Hassanali.

With continued cuts in aid to Africa, a shift that has led to contraction in the number of highly paid NGO executives in the country in the last 10 to 15 years, the survey established that this trend has had a negative impact on rents for detached houses, as landlords sell up, detached house prices too."

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