Despite economic challenges impacting average income, land prices in Nairobi’s suburbs demonstrated resilience, rising by an average of 1.3 percent per acre in the first quarter of 2024. HassConsult’s latest land price index reveals that the average price per acre now stands at Sh203.7 million, surpassing the Sh200 million mark for the first time in the previous quarter.
Lavington and Spring Valley led the pack with price growth of four percent and 3.8 percent, respectively, while Kileleshwa experienced a marginal decline of -0.1 percent. Sakina Hassanali, Head of Development, Consulting, and Research at Hass Consult, noted that despite a slowdown compared to the previous quarter, the sustained demand in the upper end of the market is evident through the growth in prices across 17 out of 18 suburbs.
Additionally, land prices in satellite towns saw an average increase of 3.03 percent, with Kiserian, Limuru, and Ongata Rongai recording the highest quarterly gains. Hassanali attributes the revival of land as a competitive asset class in satellite towns to an average annual growth rate exceeding 10 percent.
The report suggests that with the Central Bank of Kenya projecting a decrease in interest rates in the coming months, stable price growth over the past two years makes land an even more attractive asset. Satellite towns are poised to surpass Treasury Bills in annual returns, with Ongata Rongai leading with a 16 percent annual price gain.
Developers have shown a preference for areas with lower prices than the satellite town average, considering overall costs due to higher building input prices. On an annual basis, suburban land prices rose by five percent, while satellite town prices increased by 11.2 percent.
Despite high-interest rates impacting financing costs, the property market saw a 2.7 percent growth in asking prices across all properties during the quarter. The rental market also experienced a slight increase of 0.4 percent in the first quarter of 2024, with Westlands emerging as the most attractive business district with a 5.8 percent increase in asking rent.
