The cost of land in five Nairobi suburbs and satellite towns experienced a slight decline during the final quarter of last year, covering October to December.
A report by Hass Consult, released on Wednesday, January 22, revealed that land prices in Gigiri, Kitisuru, Muthaiga, Ngong, and Kiambu towns registered marginal decreases compared to the third quarter, which spanned July to September.
Among these areas, Kitisuru recorded the most significant drop in land prices within the Nairobi Metropolitan Area, showing a depreciation of 1.4%. Kiambu followed with a smaller drop of 0.3%.
Why Land Prices Dropped
Sakina Hassanali, the Head of Development Consulting and Research at Hass Consult, explained that the decline was influenced by economic uncertainty, which made some developers delay their decisions to acquire land.
“The infrastructure-driven price surge in areas like Thika, Kiserian, Mlolongo, and Syokimau appears to be slowing down, especially after experiencing steep price increases in previous quarters,” she stated.
The report also pointed out that the tough economic environment led to widespread job losses and high-interest rates, making it harder for potential buyers to invest in land during this period.
Areas Where Land Prices Increased
While some towns saw a drop in land prices, other locations recorded significant growth. In Nairobi, areas like Karen, Kileleshwa, Kilimani, Langata, Lavington, Loresho, Nyari, Parklands, and Ridgeways experienced price increases.
Similarly, satellite towns including Riverside, Runda, Spring Valley, Upper Hill, Westlands, Juja, Athi River, Ongata Rongai, Ruiru, Syokimau, and Thika also saw land prices appreciate.
For instance:
- Juja had the highest appreciation rate at 4.1%.
- Land prices in Syokimau, Ruiru, and Parklands also increased significantly, with current prices at:
- Juja: Ksh23.1 million per acre.
- Syokimau: Ksh37.8 million per acre.
- Ruiru: Ksh35.6 million per acre.
- Parklands: Ksh448.7 million per acre.
Rental Prices Also Affected
The report further highlighted that rental prices dropped in some of Nairobi’s high-end estates, including Karen, Kileleshwa, Muthaiga, Runda, Westlands, and Ngong, during the same quarter.
Sakina Hassanali attributed this trend to the challenging economic times experienced in the country towards the end of the year. The tough financial conditions forced many landlords to lower rental charges in order to retain tenants.
Despite the mixed trends, the report underscores a significant shift in the dynamics of land and property prices across Nairobi and its satellite towns, driven by both economic and infrastructural factors.
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