LAND in Nairobi remains most expensive in the Upper Hill area at an average of Sh509.5 million an acre but prices in Kitisuru, Loresho and Gigiri are growing at the highest rate, data by HassConsult for three months to through December shows.
An acre in Nairobi now costs an average of Sh173.6 million, a nine per cent rise over last year and 5.74 times more than eight years ago.
The price in the Upper Hill is 7.6 per cent higher than in December 2014, the firm's fourth quarter report based on advertisement data from Nairobi's 18 suburbs and 14 satellite towns suggests.
It is followed by Kilimani, Westlands and Parklands where an acre cost an average of Sh420.5 million, Sh388.9 million and Sh386.3 million, respectively, in December after a growth of 13.1, 7.5 and eight per cent year-on-year.
The highest return on land among the suburbs in Nairobi was generated in Kitisuru, Loresho and Gigiri where prices increased by 26.1, 23.4 and 14.6 per cent, respectively, to Sh74.7 million, Sh77 million and Sh208.4 million.
Donholm, Karen and Runda also experienced a double-digit growth in value of land at 13.9, 12.2 and 11.5 per cent year-on-year, respectively, to Sh47.7 million, Sh50.5 million and Sh74.3 million.
“This movement (in land prices) is cyclical. What happens is that when a suburb becomes fashionable, everybody moves in and prices gets too expensive, and when that happens they start to move out,” head of research and marketing Sakina Hassanali said. “So what you will likely see next year is that Kitisuru will flatten, just like Loresho which is now a hot suburb.”
In Nairobi's satellite towns, however, prices are being driven largely by infrastructure development.
An acre in those towns now goes for an average of Sh15.6 million – an average growth of 11.9 per cent year-on-year.
Kiserian posted the highest jump in cost per acre at 25.3 per cent to Sh6.1 million.
Prices in Kitengela, Ngong, Kiambu and Athi River climbed 15.9, 12.3, 12.3 and 11.8 per cent, respectively, to Sh8.6 million, Sh17.6 million, Sh35.9 million and Sh11.4 million an acre.
The value of land, however, dropped in Spring Valley, Eastleigh and Mlolongo by 3.9, 0.6 and 0.4 per cent, respectively, in December compared to the previous year to Sh141.5 million, Sh277.8 million and Sh27.2 million.