Property prices remained stagnant in the third quarter of 2024 (July to September), according to the latest market report from HassConsult. The report indicates that land prices in Nairobi’s suburbs saw a slight increase of 1.6%, reflecting ongoing economic uncertainty and recent civic unrest. Rental prices also experienced a decline during this period.
Sale prices across properties in Nairobi’s suburbs and satellite towns grew by just 0.7%, a decrease from the 1.0% growth observed in the second quarter. Meanwhile, asking rental prices contracted by 0.6%, after remaining flat in the previous quarter. The 1.6% increase in land prices in Nairobi’s suburbs was slightly lower than the 1.8% growth recorded in the second quarter.
The protests that took place in June and July contributed to a cautious pricing environment amid uncertainty, impacting a market that had previously experienced strong price growth in late 2023 and the first half of 2024.
Sakina Hassanali, head of development consulting and research at HassConsult, noted, “The property rental market eased after a strong period of growth between October 2023 and June 2024, when monthly rental price growth averaged three percent. The market aligned with prevailing tough economic conditions, characterized by protests in June and July.”
In terms of sales prices, all properties in Nairobi’s suburbs remained unchanged at -0.9%, while satellite towns experienced a minor decline of 0.2%, contrasting with a 2.1% growth in the second quarter.
Notably, suburbs such as Gigiri, Kilimani, Kitisuru, and Runda saw slight decreases in property prices, while areas like Ridgeways, Loresho, Muthaiga, and Westlands recorded marginal increases.
Apartments, which constitute the majority of available units for sale (67.7%) and letting (62.8%) in Nairobi, lagged behind standalone units in price appreciation. Seven out of nine suburbs with apartments—Kileleshwa, Kilimani, Lavington, Muthangari, Upperhill, and Westlands—reported negative price movements, as did six out of nine satellite towns, including Athi River, Ngong, Kitengela, and Ruiru.
“The apartment segment saw some price correction in the period due to increased supply of units, which now account for two thirds of all property available for sale in the market,” said Hassanali.
The price-performance at the end of the quarter reflected the general slowdown in the real estate sector coming into the quarter.
Official government data shows that the construction sector GDP contracted by 2.9 per cent in quarter two of 2024, compared to a growth of 2.7 per cent in the corresponding period in 2023.
With the reduction in inflation and expected fall in interest rates however, both the rental and sales segments are looking at prospects of recovery in the coming months as consumer purchasing power improves.
Positive price movement however showed overall resilience of land as an asset in a period of economic difficulties, characterised by high interest rates and uncertain political environment.
Rising land demand for new developments supported the price growth, as the real estate sector continued its recovery from a prolonged slump.
In the city’s suburbs, land prices have now gone up by more than one percent, in each of the last four quarters, breaking the prior run of 26 straight periods of sub-one percent growth.
Parklands, which has had a surge of development activity – for both commercial and residential developments in the last two years, led the market with land price increases of 3.4 per cent to average Sh434.2 million per acre.
Upper Hill however remained the most expensive place to buy land with an acre going for an average Sh506 million, followed by Westlands (Sh479.6 million), Parklands (Sh434.2 million), Kilimani Sh406.1 million) with Muthaiga closing the top five costly areas with an average land asking price of Sh383.2 million per acre.
