Land prices in Nairobi and its environs showed mild recovery in the second quarter, at a time when investors who froze investments in land at the peak of the Covid-19 economic crisis are slowly returning to the market on the improved business environment.
This is according to a new report by HassConsult which indicates that land prices in Nairobi improved by 0.3 percent while the satellite towns showed a 1.1 percent increase.
HassConsult Head of Development Consulting and Research Sakina Hassanali said select areas within the suburbs and towns are being favored by proximity, adding that these places are opening up.
Hassanali added that this is in turn attracting developer and speculator interest and thereby improving asking prices.
In the Nairobi suburbs, Nyari was the best performing suburb. According to the report, prices in the suburb improved by 2.25 percent over the quarter, and 6.24 percent annually.
The report has largely attributed this to the installation of the Westlands Redhill Link Road that opened access to the suburb to Nairobi’s second CBD, Westlands.
On the satellite town front, Ngong town in particular continues to exhibit strong growth driven by a new generation of landowners who are keen to unlock wealth.
The town recorded an 18.1 percent growth on an annual basis, the highest annual land growth rate in six years against an average of 2.9 percent on all towns and 7 percentage points ahead of the second best, Ongata Rongai whose land price increases were captured at 11.8 percent in the year.
The performance is attributed to a new generation of landowners who are subdividing huge parcels of land which are more affordable to speculators and developers which in turn is driving prices.
“Land in Ngong was traditionally held by an old generation who owned large chunks of more than five acres with an aim of maintaining their wealth. However, we are seeing an end to this era as a new generation i.e., their heirs are keener on cashing in on this land by selling parcels,” Hassanali noted.
“This new generation has led to an increase in the supply of subdivided of eighths and quarter parcels for sale thus making it possible for other Kenyans to own land in Ngong,” she added.
Additionally, Ngong is benefitting from the ongoing construction of the Ngong-Suswa Road which will further open the town.
Nairobi’s land prices slowed in 2017 on tough business environment — survey
Hassanali added that the trend in Ngong is tracking that in Kiambu County which have experienced booms over the last decade due to a combination of infrastructure development, and subdivision sales which have made them attractive for speculation purchases.
Sector’s overall performance
The report comes months after the firm revealed that buyers’ preference in more than 5 years.
In February, HassConsult reported that Muthaiga and Donholm estates had posted the biggest jump in land prices in Nairobi over the past six years, driven by exclusivity and ease of access.
The firm revealed that the price of an acre of land in Muthaiga had gone up by 71 percent since 2015 to Sh185.2 million in February 2021, while the cost of the same size of land in Donholm has risen by 48 percent to Sh70.8 million.
The report attributed Muthaiga’s appeal to its continued exclusivity, having so far escaped encroachment by apartment builders. Land scarcity was also noted to have helped drive up prices in the area, which is one of the oldest high-end residential estates in the city.
As for Donholm, the gain in its land value was helped by road development that has eased access to the area and a mushrooming of malls in the vicinity that has brought previously unavailable amenities closer to residents.
The growth was also on account of the recent upgrade of the Outer Ring Road to a dual carriageway, that has eased access to Nairobi’s Eastlands estates, among them Donholm.
Overall, HassConsult notes that land value in Nairobi has increased by 6.28 fold since December 2007.
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