HassConsult, which conducts the only property pricing index in east Africa's largest economy, said developers had cut back or postponed many new construction plans, ending a construction boom that had characterised the last decade. A presidential election later this year or early 2013 is also unsettling some foreign investors, HaasConsult said, while developers were looking to foreign currency loans at more affordable rates. "Developers completing their buildings are under a great financial pressure. Their (material) costs had climbed sharply and now their financing costs have jumped," said Farhana Hassanali, property development manager at HassConsult. Housing Finance, the only listed dedicated mortgage financier in Kenya, in September said the cost of construction materials had risen by some 40 percent. Year-on-year inflation rose for 13 straight months to hit a high of 19.72 percent in November, before easing to 18.93 percent in December after the central bank raised rates aggressively, sparking a jump in commercial lending rates. Commercial banks have been forced to extend repayment periods to avoid massive loan defaults. "The stick that has been used to halt inflation has unfortunately hurt the real estate industry. At the moment investors need at least 30 percent just to cover their financing cost," said Nathan Luesby, a consultant at HassConsult. Returns from real estate investment in Kenya outpaced those from investments in stocks and fixed securities over the last decade, a study by a Kenyan fund manager showed last year. A growing middle class, mainly in Kenya's capital Nairobi fueled demand for housing and commercial properties that had some analysts worried that a bubble was developing in the real estate industry. Booming construction in city suburbs created thousands of new jobs, with developers encroaching onto farmlands, national parks and other public land, but all that is now under threat as the government has also moves to reposes grabbed properties. "This is going to be a very big hit for the jobs and the GDP as the sector comes to a halt," said Luesby.