- The Index reveals all the 18 Nairobi suburbs recorded higher buying prices, led by Langata, Ridgeways and Spring Valley.
- The best rental returns on an annual basis were found in Ongata Rongai (15.4%), Athi River (15%) Kitengela (11.6%), Loresho (11.5%) and Nyari (9.9%).
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Uncertainties around government bills and bonds have seen investors pump more money into the property market, pushing up property sale and rental asking price trends in the fourth quarter of 2023.
According to the latest Property Index by HassConsult, property sale and rental asking prices have gone up by 4.1 per cent and 2.5, respectively.
The report says the forex exchange pressure on the Shilling, which has so far increased the country’s debt burden, has raised concerns about the safety of government bonds.
“This has seen some investors seek alternative investments, which include property,” the report reads.
As a result, HassConsult says the market offered a total return (capital gains plus rental yield) of 8.3 per cent in the period under review.
Sakina Hassanali, the head of development, consulting and research at HassConsult, says the Kenyan property market attractiveness to investors, has also been propelled by increased input costs for developers on ongoing and future projects.
“This also on the back of the weakening shilling which has in turn buoyed up the asking prices due to augmented demand from the investors,” Hassanali said.
The Index reveals that all 18 Nairobi suburbs recorded higher buying prices, led by Langata, Ridgeways and Spring Valley, while in the satellite towns, Juja, Kitengela and Athi River were top performers during the quarter.
The best rental returns on an annual basis were found in Ongata Rongai (15.4 per cent), Athi River (15 per cent) Kitengela (11.6 per cent), Loresho (11.5 per cent) and Nyari (9.9 per cent).
“These returns competed favourably with those of Treasury bills and bonds whose net returns ranged from 9.5 percent to 17 percent in 2023,” the report reads in part.
“Property returns from the best-performing satellite towns and suburbs also outperformed the NSE 20 Share Index, which had a return of (-9.4) per cent in 2023, and bank savings that averaged 3.8 per cent in interest through the first 10 months of the year.”
The positive performance in the property market is despite the difficult economic conditions characterised by high inflation, the weakening currency and high-interest rates.
HassConsult says the elevated inflation which averaged 7.7 per cent in 2023, meant reduced spending power for both home buyers and rental customers, while the weaker shilling raised input costs for developers which in high-demand suburbs had inflationary effects on property prices.