A section of Upperhill area in Nairobi. Upperhill cemented its position
as the most costly location in a year where plot prices rose by 1.69
percent. FILE PHOTO | NMG
Kiserian in Kajiado County offered Nairobi investors the lowest
price for ...
an acre of land even as Upper Hill cemented its position as the most costly location in a year where plot prices rose by 1.69 percent.
an acre of land even as Upper Hill cemented its position as the most costly location in a year where plot prices rose by 1.69 percent.
With an average price per acre of land in
Kiserian going for Sh7.5 million, the area offers prospective land
buyers seeking to build homes in Nairobi’s satellite towns the best bet.
The
price guide is contained in a report by HassConsult Real Estate that
lists Upper Hill as the most expensive, with an acre there going for
Sh545 million followed by Kilimani at Sh433 million.
The
report also reveals that land costs in the city increased by 1.69
percent over the past year while the satellite towns have seen a 5.11
percent rise, suggesting a cooling in prices following a sluggish
property market.
However, HassConsult says that
returns from land over the past decade have outpaced other asset classes
like government bonds and equities.
“The index, which compares Nairobi’s land price movements to
other asset classes and commodities, found that the city’s land had
outperformed all other asset classes in return on investment,” said
HassConsult.
Land prices within the city have increased
638 percent since 2017 while the city’s satellite towns in Kiambu and
Kajiado have witnessed a 894 percent price jump over the same period.
Land prices in Nairobi Suburbs
Average value of land in Nairobi
suburbs have gone from Sh30.3 M in 2007 to Sh193.1M in 2019.This means
the land prices are 6.4 times higher than in 2007
Average value (Sh-mn/Acre) | Change from 2007 (Fold) | |
---|---|---|
Upperhill | 546 | 9 |
Kilimani | 433 | 6 |
Parklands | 419 | 5 |
Westlanda | 418 | 6 |
Kileleshwa | 311 | 8 |
Eastleigh | 302 | 6 |
Gigiri | 239 | 7 |
Lavington | 237 | 6 |
Muthaiga | 179 | 7 |
Spring valley | 168 | 4 |
Nyari | 106 | 6 |
Loresho | 93 | 6 |
Kitusuru | 91 | 7 |
Runda |
The high appetite for property saw coffee plantations in Kiambu
cleared to pave way for gated housing estates and shopping centres.
The
boom has also been driven by Kenya’s growing middle class who cannot
afford property in the capital, HassConsult says. Besides Kiserian,
other cheaper locations include Kitengela at Sh12.1 million per acre and
Athi River (Sh13.4 million).
Ruaka
in Kiambu County had the most expensive land among locations in
Nairobi’s satellite towns with an acre going for Sh90.9 million,
followed by Kiambu (Sh43 million), Mlolongo (Sh27.2 milliion) and Ruiru
(Sh25.6 million. Real estate companies like Cytonn have invested heavily
in areas like Rwaka and Ridgeways on Kiambu road, mainly targeting the
middle class.
Nairobi’s Karen suburb offers the lowest
price for an acre of land among high-end estates. The average price per
acre there was Sh62.2 million against Sh84.7 million in Runda and Sh90.9
million in Kitisuru.
Land Prices in Nairobi satellite town
Average value (Sh-mn/Acre) | Change from 2007 (Fold) | |
---|---|---|
Ruaka | 91 | 8 |
Kiambu | 43 | 8 |
Mlolongo | 27 | 6 |
Ruiru | 26 | 11 |
Tigoni | 24 | 10 |
Limuru | 23 | 12 |
Syokimau | 23 | 7 |
Ngong | 21 | 7 |
Ongata Rongai | 21 | 9 |
Thika | 19 | 9 |
Juja | 14 | 16 |
Athi River | 13 | 10 |
Kitengela | 12 | 8 |
Kiserian | 8 | 8 |
By contrast, land in Muthaiga is the most expensive at Sh176.1
million, followed by Spring Valley (Sh168.3 million) and Sh105.8 million
in Nyari on Limuru Road.
Given the high land prices in
these areas - with the exception of Karen - experts say that for these
surburbs to experience a significant increase in prices, zoning
regulations need to be relaxed to “allow for more space for people to
live and thus more value can be derived from the land”. This is
reflected in the cost of land in places like Parklands, Kileleshwa and
Lavington where the zoning rules have been relaxed. An acre goes for
Sh310 million in Kileleshwa and Sh237 million in Lavington respectively.
Despite
the growth in some areas, a slowdown in the property sector is being
mirrored in other segments of the economy plagued by reduced
profitability, job cuts, freezes in hiring and near stagnant wages.
However,
property dealers expect the repeal of the rate cap to spur growth in
the sector, prompting a rally in home and land prices.
In
2016, the government limited rates banks can charge customers to four
percentage points above the central bank’s benchmark - currently nine
percent - saying they were concerned about high rates.
Earlier
this month, President Uhuru Kenyatta directed that lawmakers remove the
cap on commercial lending rates. MPs will next week start debate on the
proposal.
“Repealing the rate cap is expected to
result in banks increasing lending to the private sector which will spur
the general economy,” says HassConsult.
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