Land prices for both suburbs and satellite towns have eased over the first quarter of 2020, according to the 2020 quarter one index by property consultancy firm HassConsult.
Land prices in the suburbs decreased by 0.9 per cent while in the satellite towns slightly dropped by 0.21 per cent.
Upper hill emerged the priciest suburb with an acre going at Sh530.6 million while Ruaka was the most expensive satellite town with an acre going for Sh90.4 million.
Part of the Nairobi suburbs maintained a similar trend with Muthaiga registering a 2.38 per cent increase in the 1st quarter and Spring Valley showing a 8.87 per cent increase in the past year.
Kitengela continued to grow with a 2 per cent increase in the first quarter and a 12.68 per cent increase in the past 12 months.
Investors showed a reduced appetite for land on speculation that there is room for further price drops.
“With the global economy experiencing unprecedented fluctuations and declines, investors are displaying caution and delaying purchasing decisions in the absence of market stability.” The reported revealed.
In Nairobi, the quarterly drop was the biggest since the index was launched while for satellite towns the last drop was last seen in the third quarter of 2017.
“The Lands Registry has been temporarily closed as a COVID-19 preventive measure, effectively slowing down land transactions. This is in addition to the general slowdown in economic activity that the pandemic has caused which could potentially further see adverse activity in the sector,” HassConsult head of research and marketing Sakina Hassanali said.
Annually prices in Nairobi's suburbs marginally increased by 0.28 percent while for satellite towns, prices were up 6.51 per cent.
Despite the challenges the COVID-19 pandemic is posing to the economy Hassanali said that should the pandemic be well managed and there is a gradual recovery in the economy, these efforts will be reflected in the real estate market.
“The COVID-19 pandemic has left some landowners unexpectedly limited liquidity and as a result, we may see a bigger supply in land moving forward, " she said .
This, she said, will create an opportunity for shrewd investors who have not been affected since land has traditionally outpaced other asset classes over the long-term.
