Land prices in Nairobi's suburbs grow at fastest rate in 8 years
By Ibrahim Omar |
Land prices in these suburbs increased by 3.3 per cent between October and December 2023.
Land prices in Nairobi’s 18 suburbs, which are home to the city’s wealthy, grew at the fastest rate in eight years in the fourth quarter of 2023, according to a new report.
The Hass Property Index, which was released on Monday by property developer HassConsult Real Estate, shows land prices in these suburbs increased by 3.3 per cent between October and December 2023.
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It is the fastest quarterly growth since the first quarter of 2015.
The suburbs are Gigiri, Karen, Kileleshwa, Kilimani, Kitisuru, Lang’ata, Lavington, Loresho, Muthaiga, Muthangari and Nyari. Others are Parklands, Ridgeways, Riverside, Runda, Spring Valley, Upperhill and Westlands.
During the period, Muthaiga, Ridgeways and Loresho led in the price rally.
Fourteen out of the 18 suburbs recorded positive price movement in the quarter, as Muthaiga, Ridgeways and Loresho stood out in quarterly price growth at 3.7 per cent, 3.6 per cent and 3.1 per cent respectively.
“The increase offers the best sign yet that the property sector in the city is recovering from the dip occasioned by the Covid-19 pandemic,” said the report.
According to the report, the average value of an acre in these suburbs ranged from Sh65.9 million (the lowest) to Sh478.2 million in Upperhill (the highest).
“Instructively also, the average price per acre in the suburbs has now crossed the Sh200 million mark, helped by the fast rise of prices in areas such as Langata, Ridgeways, Loresho, and Muthangari which offer a mix of affordability, ease of access and mixed-use zoning,” said Sakina Hassanali, Head of Development Consulting and Research at HassConsult.
Satellite towns
At the same time, land prices in Nairobi’s satellite towns increased by 3.7 per cent, which is the fastest growth recorded since the second quarter of 2022.
The satellite towns are Athi River, Juja, Kiambu, Kiserian, Kitengela, Limuru, Mlolongo, and Ngong. Others are Ongata Rongai, Ruaka, Ruiru, Syokimau, Thika and Tigoni.
The average value per acre in the satellite towns ranged between Sh10.2 million in Kiserian (the lowest) and Sh102 million in Ruaka (the highest).
Satellite towns that are served by better access infrastructure along the Thika Road, Mombasa Road and Ngong Road arteries continued with their steady price growth on both quarterly and annual basis, led by Syokimau, Ngong and Ruiru.
“Kiambu, which has recently perceived overpricing on high speculation, jumped to the head of the queue in quarterly price growth at 9.4 per cent, pointing to renewed demand from investors looking to take advantage of the price stagnation seen in previous months,” said Sakina.
Instructively, the increase in land prices is faster in satellite towns compared to suburbs because the cost of an acre in the satellite towns is more affordable to both private and commercial developers compared to prices in the suburbs.
“On an annual basis land prices in the suburbs rose by 4 per cent as satellite towns saw a price gain of 9.3 per cent, which was marginally better than the growth of 9 per cent recorded in 2022,” said the report.
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