The Kenya Bankers Association (KBA) plans to launch a house price index by end of the year in a bid to assist policy-makers take a wider view of changes in the economy and to assist investors in managing risks.
The new quarterly index will at first cover the Kenyan capital Nairobi, where property values have rocketed in the past decade amid fears of a looming housing bubble.
Although the Central Bank of Kenya closely monitors consumer price index, private sector credit data and other developments in the global economy, it does not refer to housing prices due to the lack of a reliable house price index.
Kenya does not have an independent tool for tracking property prices. The Hass-Consult index, which is sponsored by real estate firm HassConsult, is the only house price index in the country.
Jared Osoro, director of research and policy at KBA said: “It [the new index] is really a policy tool for both market players and policy-makers.”
The new index will show changes in overall house prices and by category of residential property, such as whether it is a flat or a town house. It will also give a breakdown of prices by factors such as the house type, features and proximity to social amenities as well as access to roads, etc.
Mr Osoro said the index will help the policy-makers to move away from “a very narrow consumer price index to looking at asset prices.”
– Additional reporting by Reuters