Land prices in Nairobi’s suburbs rose by 1.6pc Q3 2024

HassConsult has released the Hass Property price indices for third quarter of 2024, with rental prices falling in a tough economy even as overall property selling prices remained steady.
Sale prices across property in Nairobi’s suburbs and satellite towns grew by 0.7 percent, compared to a 1.0 percent growth in quarter two, while asking rental prices contracted by 0.6 percent, having been flat in the previous period.
Protests that affected the country during the year in June and July saw cautious pricing in a period of uncertainty, dampening the market that was coming off a period of strong price growth in the last quarter of 2023 and first half of 2024.

“The property rental market eased after a strong period of growth between October 2023 and June 2024, when monthly rental price growth averaged at 3 percent. The market aligned with prevailing tough economic conditions, characterized by protests in June and July,” said Ms. Sakina Hassanali, Head of Development Consulting and Research at HassConsult.

Sales prices for all property in the Nairobi suburbs meanwhile remained unchanged at -0.9 percent in the quarter, while satellite towns witnessed a decline of 0.2 percent, compared to a growth of 2.1 percent in the second quarter.

Apartments in both city suburbs and satellite towns lagged-behind standalone units in price appreciation. Seven out of nine suburbs with apartments reported negative price movement, as did six out of nine satellite towns. Apartments account for the bulk of available units for sale (67.7 percent) and letting (62.8 percent) in Nairobi.

“The apartment segment saw some price correction in the period due to increased supply of units, which now account for two thirds of all property available for sale in the market,” said Ms Hassanali.

Rising land prices driven by developer push for high density housing projects

Land prices in Nairobi’s suburbs rose by 1.6 percent in the third quarter of the year, marginally lower compared to the second quarter growth of 1.8 percent.
· Positive price movement showed resilience of land as an asset in a period of economic difficulties, characterized by high interest rates and uncertain political environment.

· Parklands (3.4 percent), Langata (2.9 percent), Kileleshwa (2.8 percent) and Lavington (2.5 percent) were the catalysts for the third quarter’s increase in price, trending ahead of average growth for suburbs.
· In Nairobi’s satellite towns, the average price of an acre of land rose by 3.01 percent in quarter three, higher than the increase of 2.24 percent witnessed during the previous period.
· A mix of attractive pricing levels and upcoming infrastructure development helped raise prices in Mlolongo and Thika up by 6.6. percent and 6.3 percent respectively.
· Annual price growth of between 18 and 18.5 percent in Syokimau, Limuru and Mlolongo portrays these areas favourably, rivalling returns on offer from government bonds and NSE shares.

Property market stagnates in period characterized by economic uncertainty and civic Unrest

Property sales prices were stagnant quarter-on-quarter, returning an overall growth of 0.7 percent in the third quarter of 2024.
· Apartments reported negative price movements in many of the city suburbs and Nairobi’s satellite towns, in large part due to the increase of supply currently amounting to 67.7 percent of total advertised stock.
· The rental property market witnessed price corrections of 0.6 percent on average over the third quarter of 2024, after sustained gains in the last quarter of 2023 and first quarter of 2024.
· Economic uncertainty from nationwide protests late June and July may have contributed to lower rent price expectations in advertised properties over the quarter.

The Hass Composite Sales Index is representative of all properties for sale in Kenya.
• Property values have increased by 5.09 times since 2000.
• The index shows a property price rise of 0.33% in the last month, and a rise of 0.66% in the last quarter and a 8.71% rise in the last year.

• The annual average is representative of the average price of all mid to upper class properties offered for sale in Kenya.
• The average value for a property has gone from 7.1 million in December 2000 to 36.5 million in September 2024.
• The average value for a 4-6 bedroom property is currently 40.6 million.
• The average value for a 1-3 bedroom property is currently 13.1 million.