- A HassConsult report shows that land prices in Nairobi suburbs remained static in the last quarter of 2022
- The perfomance is a result of the spillover effect from the previous quarter, when activity slowed down across the general economy
- Property prices also recorded a 2.2% drop driven by price declines across the board
A new report by HassConsult shows that land prices in Nairobi suburbs remained static in the last quarter of 2022.
The land prices indices show that land in the areas grew by a marginal 0.2% during the period under review.
The performance of land prices in Nairobi over the last three months of 2022 is a result of the spillover effect from the previous quarter, when activity generally slowed down across the general economy.
HassConsult observed that some suburbs are benefiting from the ripple effect of Westlands’ increasing commercialisation.
Loresho was the best-performing suburb over the quarter, with prices increasing by 3.2% while Spring Valley topped annually with a 14.64% price appreciation.
Westland’s growth helps surrounding surburbs rise in value
Sakina Hassanali, Head of Development Consulting and Research at HassConsult said that the recent rise of Westlands as the city’s premium commercial and entertainment hub has drawn more interest to its surrounding suburbs, creating more value in these quiet neighbourhoods that provide quick access to Westlands working
zones as well as services for shopping and recreation.
“Investors with insufficient funds to afford Spring Valley at KSh 220 million per acre are absorbed by Loresho’s lower priced price of KSh 95.5 million per acre,” she continued.
Hassanali added that the trend presents a window of opportunity for prospective buyers who want to live close to a high-end commercial hub.
Land prices in the satellite towns continued to be static over the quarter, registering a 0.97 growth. Similar to the city, low economic activity dragged the townland market’s performance over the last three months of 2022.
Land in Nairobi outskirts offer best return on investment
HassConsult noted that in the Kiambu County towns, Limuru posted the strongest quarterly growth at 4.2% as the town’s attractiveness is being enhanced because it is still relatively undeveloped compared to its peers.
“Limuru is currently less developed than other towns in Kiambu county and, as a result, is being seen as the next development frontier, offering uniquely green experiences that characterise the area,” said Hassanali.
Additionally, the area is attracting speculators on account of the resumed plans to construct the Rironi-Mau Summit Road.
Property prices in Nairobi drop
HassConsult also released the Hass Property price indices for the fourth quarter of 2022 showing property prices
recorded a 2.2% drop driven by price declines across the board resulting in an annual property price rise of 4.8% in 2022.
Houses in both Nyari and Muthaiga were front runners, over 2022 with price rises of 11.2 and 6.2% respectively. Both Nyari and Muthaiga are beneficiaries of low-density housing.
Over the last decade, house prices in the city have increased up to 2 times faster than apartment prices due to limited density allowances in high end villa suburbs.
“City planning only permits building of one or two houses per acre in a majority of the city’s townhouse suburbs
including but not limited to Muthaiga, Gigiri, Nyari, Kitisuru, Spring Valley, Loresho, Ridgeways, Runda and Karen – leaving an enormous part of the city locked away for only a small fraction of its residents who can afford homes of an average price of KSh 80 million,” said Hassanali.
House prices rise by 40% in ten years
The company noted that house pricing in these areas have benefitted from house price appreciation due to strained supply caused by planning laws.
While apartment prices have increased by 22% on average in the last decade, houses have soared 40% in the same time period – almost twice as much.
Results from the Hass Rental Index posted a fall of rental prices of 1.5% in the quarter, resulting in an overall
drop of 0.3% over 2022.
The sluggish movement on rental prices across most markets was reflective of the rise in the cost of living in 2022 as well as global inflationary pressures that have worked to reduce real income.