Nairobi property prices surge as demand for standalone houses increases
Despite these trends, the Nairobi property market remains vibrant, with demand for standalone houses driving much of the growth, while apartment prices face slower gains due to oversupply.
Property prices in Nairobi and its surrounding areas saw a significant rise in 2024, growing at 5.2%—a sharp increase from the previous year's 2.5%. This surge can be attributed to the growing demand for standalone houses, whose supply has dwindled in comparison to apartments, according to a recent survey by real estate firm HassConsult.
The report reveals that areas such as Juja, Ridgeways, and Loresho saw the highest price growth, with increases of 12.9%, 12.5%, and 11.6%, respectively, in the year leading up to December 2024.
"Standalone units performed strongly due to their limited supply relative to other property types," said Sakina Hassanali, head of development consulting and research at HassConsult.
"In contrast, the increasing availability of multi-dweller units such as apartments has slowed their price growth," he added.
Standalone houses saw an average price increase of 7.5%, significantly outpacing the 1.6% growth seen in apartments and the 0.8% increase in semi-standalone homes. While standalone houses accounted for just 7.2% of the market in December 2024, their relative scarcity has fuelled their price rise. Ten years ago, standalone homes made up 32.7% of the market.
On average, a property in Nairobi was priced at Sh36.7 million by the end of December 2024. Standalone homes with four to six bedrooms averaged Sh40.6 million, while smaller one- to three-bedroom properties were priced at Sh13 million.
The rental market in Nairobi experienced a slight dip in 2024, with prices contracting by a marginal -0.02%. This marks a reversal from 2023 when rental prices rose by 2.5%. The sluggish growth in rents can be attributed to the tough economic conditions facing landlords.
"Despite these positive trends, property returns for 2024, comprising capital gains and rental yields, remained below returns from other asset classes," said Hassanali. Yields from property stood at 7.2% in suburbs and 5% in satellite towns, trailing behind government securities and equities, which offered returns of between 9.5% and 11%.
The average monthly rent across 14 Nairobi suburbs and 10 satellite towns surveyed by HassConsult was Sh167,704. Larger homes, with four to six bedrooms, commanded an average asking rent of Sh237,107, while one- to three-bedroom homes rented for around Sh92,377.
Despite these trends, the Nairobi property market remains vibrant, with demand for standalone houses driving much of the growth, while apartment prices face slower gains due to oversupply.
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