Kenya’s property market is sitting on sinking sand
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A clear sign of the market’s slowdown is shown on the available reports regarding construction materials and the value of building plan approvals which are decreasing month after month.
Cement uptake in six months to June 30 fell 7.9 per cent, while data from the Kenya National Bureau of Statistics (KNBS) indicate cement consumption in the first six months of the year stood at less than 2.75 million tons, down from 2.98 million in 2017.
Consumption hit a four-year low after rising to a peak of 3.1 million tons in 2016 at the height of construction of the first phase of the standard gauge railway (SGR), Kenya’s single largest post-independence infrastructure project. Lower consumption has led to reduced production.
During this period, production stood at 2.84 million metric tons from 3.18 million metric tons a year ago. Bamburi reported a 66.5 per cent dip in net profit for the year ended December to Sh1.97 billion, while ARM Cement’s loss widened 32 per cent to Sh6.54 billion.
The same trend applies to almost each and every sector of material production and sales related to the construction and real estate industry. Production of galvanised iron sheets also went down by 6,500 tons to 111,562 metric tons, the data shows.
The volume of construction material imports such as iron, steel bars and rods declined by 4.9 per cent during the first quarter of 2018.