The real estate market in Nairobi experienced a notable drop in rental prices across several suburbs and nearby satellite towns during the final quarter of last year, covering October to December.
In its Fourth Quarterly Report released on Wednesday, January 22, Hass Consult revealed that rental prices fell in key areas such as Karen, Kileleshwa, Muthaiga, Nyari Estate, Runda, Westlands, Kiserian, Ngong, and Tigoni.
According to the report, the steepest declines were recorded in Ngong and Nyari Estate, where rental prices dropped by 2.4%. Muthaiga followed closely with a reduction of 1.4%.
The report attributed this downward trend to the challenging economic conditions in the country, which forced many landlords to reduce their rental rates to attract tenants.
“Rental prices for 2024 remained almost flat with an annual decrease of -0.02%, highlighting the struggles landlords faced in adjusting rents upwards amid a tough economic climate,” the report stated.
Areas Where Rent Increased
While some areas saw significant rent drops, others experienced a surge in rental prices. Gigiri and Juja topped the list of estates with rising rents.
In Gigiri, rental prices jumped by an impressive 6.7%, while Juja and Athi River saw increases of 6.4% and 5.7%, respectively.
Other estates that experienced rent hikes include Kitisuru, Lang’ata, Loresho, Lavington, Limuru, Ongata Rongai, Ruiru, Kiambu Town, and Kitengela.
Sakina Hassanali, the Head of Development Consulting and Research at Hass Consult, explained that these increases were largely driven by falling inflation rates.
The reduced inflation improved tenants’ purchasing power, enabling landlords to raise rental prices.
Housing Purchases in Nairobi
The report also highlighted estates where the purchase of houses and apartments surged during the quarter. Estates such as Loresho, Ridgeways, and Runda recorded the highest demand for house purchases.
Detached housing units, in particular, performed exceptionally well, both on a quarterly and annual basis, thanks to their limited availability.
Detached house prices grew by 1.5% quarter-on-quarter and an impressive 7.5% year-on-year.
On the other hand, the growing supply of multi-dweller housing units, such as apartments, slowed down price growth in that category.
The report noted a quarterly decline of 0.8% in semi-detached house prices and a 0.6% decrease in apartment prices.
“Annual growth in the real estate market was driven by detached housing units, which remain in short supply. However, the abundance of apartments and semi-detached houses placed downward pressure on their price growth in the fourth quarter,” the report added.
This comprehensive report sheds light on the varying trends in Nairobi’s real estate market, offering valuable insights for tenants, landlords, and property investors navigating the changing economic landscape.
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