Africa Prime Residential Market Performance
Despite an overall slowdown in market activity due to the lockdowns imposed throughout the year, we have witnessed a gradual rebound in prime residential sales in majority of the markets and this is expected to continue into 2021.
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The Africa Residential Dashboard indicates that residential rents declined by 19% on average in the year to December 2020 due to the current economic downturn across majority of the markets.
Dar es Salaam and Tunis recorded amongst the highest decline in prime residential rents by 33% and 34% on average in 2020 compared to 2019. This decline was attributed to the flight by expatriates and reduction in household disposable income as a result of the pandemic.
Whilst the prime residential market still remains subdued, a marked improvement in rents was recorded in Johannesburg and Cape Town in H2 2020 compared to H1 2020. This was due to the appreciation of the South African Rand against the United States dollar and easing of lockdown restrictions.
In Nairobi, prime residential sale prices decreased by 3.9% in 2020, compared to 4% in 2019. This was mainly attributed to an increase in concessions over the second half of 2020 from developers and sellers who became more flexible and were willing to negotiate lower prices with potential buyers.
Prime residential performance varied across the region with markets such as Lusaka and Dakar remaining relatively stable during the period under review. However, increased supply of residential units in Lusaka onto the market coupled with lower demand is anticipated to result in a subdued market due to rents softening in 2021.
Longer term trends towards increased demand for quality living spaces owing to remote working and the impact of the pandemic continue to be reflected in markets such as Kampala with this trend expected to continue into 2021. Affordable housing demand in markets such as Lagos are expected to persist in 2021. As such we have seen increased govern.
The dashboard also highlights that demand for quality living spaces is expected to increase especially in Kampala owing to remote working and the impact of the pandemic. Further in Nigeria, affordable housing demand is expected to persist and as a result increased government intervention have been observed in Lagos. This includes development of schemes such as HOME4MORE that are earmarked towards young professionals and expected to add circa 3,000 units to the residential market once completed.
Read the full report here
Photo by Imani Manyara on Unsplash