Subdued earnings occasioned by Covid-19 economic disruption reduced property appetite in Nairobi and satellite towns, leading to a marginal drop in land prices.
The HassConsult Land and Property Price Index for the first nine months of the year released yesterday shows overall land prices in the suburbs dropped by 0.94 per cent over the period while the satellite towns recored a 0.06 per cent drop.
Asking prices per acre for 13 out of 15 suburbs in Nairobi dropped, only rising marginally in Spring Valley, Runda, Westlands, Muthaiga and Nyari.
Spring Valley registered a 3.55 per cent increase over the quarter as the suburb continues to attract investors eyeing high-density use of land in the area. Average price for an acre piece of land is now going for Sh175.3 million in the area.
Muthaiga on other hand recorded the highest annual yield of 4.8 per cent, with average price per acre rising to Sh184.6 million.
Riverside recorded the biggest drop in land prices at 3.82 per cent while on an annual basis, Parklands led the pack with prices reducing by 8.8 per cent.
In the satellite towns, Rongai recorded the highest increase over both the quarter and on an annual basis at 4.71 per cent and 10.3 per cent, respectively while Kiambu posted the biggest drop both quarterly and annually at 5.2 percent and 7.97 per cent respectively.
Upperhill has the most expensive land with an acre in the suburb going for Sh512 million while in the satellite towns Ruaka has the most expensive land at Sh89 million per acre.
According to Sakina Hassanali, head of development consulting and research at HassConsult, while prices eased in the quarter, the marginal drop shows that land continues to show its stability over other asset classes.
“We have not seen a major drop in land values despite the challenges such as Covid-19 and the tough economic environment, proving that investors still see this as the best bet over the long-term,’’ Hassanali said.
House prices remained static with a 0.3 per cent increase over the quarter and a 2.27 per cent on an annual basis.
Loresho was the best performing suburb on an annual basis with house prices increasing by seven per cent while Riverside posted a two per cent quarterly drop and an 8.4 per cent annual drop.
In the satellite towns, Thika was the best performer with apartment prices increasing by 1.8 per cent. House correction in Juja saw prices in the suburb drop by 4 and 8.8 per cent over the quarter and on an annual basis.
Rents marginally improved over the quarter driven by Muthaiga and Ruiru housing market, which posted 2.9 per cent and 3.7 per cent respective increases.
Overall rents increased by 2.5 per cent over the quarter and 4.9 percent on an annual basis.
“A few suburbs have backed the trend of falling rents which still continue as tenants are negotiating for discounts amid the tough economic environment,” Hassanali said.
