There were mixed fortunes for both buyers and sellers in real
estate during the first quarter of this year. On the one hand, land
prices rose slightly, while on the other, those of residential
properties fell by a small margin.
Land prices
averagely increased by 17.6 per cent in the year to March, compared to
4.5 per cent in the previous quarter. Buyers are now paying 5.5 times
more compared to December 2007.
CONTINUOUSLY CHANGED
Hass
Consult research and marketing manager Sakina Hassanali said the trend
in land prices in Nairobi had changed due to emerging property hot spots
and infrastructural projects in some areas traditionally
underdeveloped.
“Unlike in the previous years where
certain areas were known to be high value areas, property investors
today have to carefully map areas with potential upgrades to realise
meaningful returns from property value increases. Places such as
Ridgeways and Loresho have had the fastest land price rises due to the
same reasons,” Ms Hassanali said.
Commercial areas
remain far more expensive than residential sites with low end, high
density places fetching almost 10 times the price of high end, low
density acreage.
The report by HassConsult and Stanlib
Investment managers covered 18 suburbs, up from the usual nine, bringing
the overall average land price in the city down marginally to Sh166.4
million per acre.
CLEAR SIGHT OF DEVELOPMENT
Stanlib
East Africa director James Muratha said land investment now required
clear sight of development activity and an eye for areas still holding
any under-valuation.
“That some city suburbs like
Ridgeways appreciated by 41.4 per cent and Loresho, 41 per cent in the
last 12 months, and given that they are in the mid-level activity
bracket, means investors must now start buying into areas slightly ahead
of the curve.
These are the areas that have not
experienced intensive development, but are gathering momentum. Highest
returns now come from being ahead of the curve,” Mr Muratha said
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