•In satellite towns, Rwaka leads with an asking price of Sh98.4 million per acre.
•Upperhill recorded the biggest drop in prices of apartments which fell by 6.9 per cent, followed by Riverside (5.6%), Parklands(4.1%), and Westlands (3.9%).
Upperhill still has the most expensive land parcels in Nairobi despite a 0.2 per cent drop, with an acre going for Sh491 million, according to the latest market survey.
Westlands follows at 449.4million, Parklands (Sh402.1 million) and Kilimani Sh399.7 million.
Among satellite towns, Rwaka leads with an asking price of Sh98.4 million per acre. Kiambu and Mlolongo have prices of Sh43.7 million and Sh34.1 million, respectively.
The high prices notwithstanding, an index by HassConsult shows that real estate prices in Nairobi and satellite towns dropped by 2.2 per cent between October and December last year, occasioned by tough economic times.
Land prices almost followed a similar trend, remaining static in the fourth quarter of the year with some regions registering a drop in prices, an index by real estate firm, HassConsult shows.
The sluggish movement on rental prices across most markets was reflective of the rise in the cost of living in 2022, as well as global inflationary pressures that have worked to reduce real income, the firm said yesterday.
Upperhill recorded the biggest drop in prices of apartments, which fell by 6.9 per cent, followed by Riverside (5.6%), Parklands (4.1%), and Westlands (3.9%).
Other Nairobi suburbs, which had a drop in prices of apartments, were Kileleshwa, Kilimani and Lavington.
Lang'ata however saw a price jump of an average 2.2 per cent across the market, as developers offered cheaper houses compared to the other featured suburbs.
Generally (all houses), Muthaiga, Nyari Estate, Gigiri, Donholm led in gains in house prices, while Kitisuru, Lavington, Loresho, Runda, Ridgeways and Karen saw house prices lose value.
Houses in both Nyari and Muthaiga were front-runners over 2022 with price rise of 11.2 and 6.2 per cent, respectively.
Both Nyari and Muthaiga are beneficiaries of low-density housing.
Over the last decade, house prices in the city have increased up to two times faster than apartment prices due to limited density allowances in high-end villa suburbs, HassConsult notes.
“City planning only permits building of one or two houses per acre in a majority of the city's townhouse suburbs, leaving an enormous part of the city locked away for only a small fraction of its residents who can afford homes of an average price of Sh80 million,” said Sakina Hassanali, head of development consulting and research at HassConsult.
These includes but not limited to Muthaiga, Gigiri, Nyari, Kitisuru, Spring Valley, Loresho, Ridgeways, Runda and Karen, she noted.
House pricing in these areas have benefitted from house price appreciation due to strained supply caused by planning laws.
While apartment prices have increased by 22 percent on average in the last decade, houses have soared 40 percent in the same time period– almost twice as much, albeit last quarters dismal performance.
Results from the Hass Rental Index posted a fall of rental prices of 1.5 per cent in the quarter, resulting in an overall drop of 0.3 per cent over 2022.
Land prices in Nairobi 18 suburbs remained static with a 0.19 per cent increase over the quarter.
The lacklustre performance over the last three months of 2022 is a result of the spill over effect from the previous quarter when activity generally slowed down across the general economy, HassConsult notes.
A number of suburbs are however benefiting from the ripple effect of Westlands increasing commercialisation.
Loresho was the best performing suburb over the quarter with prices increasing by 3.2 per cent while Spring Valley topped annually with a 14.64 per cent price appreciation.
The recent rise of Westlands as the cities premium commercial and entertainment hub has drawn more interest to its surrounding suburbs.
This has created more value in quiet neighbourhoods that provide quick access to Westlands working zones, as well as services for shopping and recreation, notes Hassanali.
According to the survey, investors with insufficient funds to afford for instance Spring Valley at Sh220 million per acre are absorbed by Loresho's lower priced price of Sh95.5 million per acre.
This trend presents a window of opportunity for prospective buyers who want to live close to a high-end commercial hub.
Land prices in the satellite towns continued to be static over the quarter registering a 0.97 growth.
Similar to the city, low economic activity dragged the town land market's performance over the last three months of 2022.
HassConsult notes that in the Kiambu County towns, Limuru posted the strongest quarterly growth at 4.2 per cent, as the town's attractiveness is being enhanced because it is still relatively undeveloped compared to its peers.
“Limuru is currently less developed than other towns in Kiambu county and as a result is being seen as the next development frontier, offering uniquely green experiences that characterise the area” said Hassanali.
Additionally, the area is attracting speculators on account of the resumed plans to construct the Rironi-Mau Summit Road.