Land prices in Nairobi have started to fall after peaking at the end of 2015, a new housing survey has shown.
Real estate firm HassConsult yesterday announced that an acre of land in Kenya’s capital had slowed 0.2 per cent to 59 million in its latest findings for the first quarter in 2016.
The fall would have been sharper were it not for a spike in Donholm estate, where prices jumped 9.3 per cent, helped in part by the expansion of Outer Ring Road into a dual carriage way.
“It is the first time that we are reporting a fall in land prices – this could be the start of a market correction,” said Sakina Hassanali, the head of research and marketing at HassConsult.
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She attributes the drop to a movement by speculators to the satellite towns where margins are still bigger and where transactions are closed faster. The findings could be a major development for the housing market where prices have risen steadily, mainly as a factor of the sharp appreciation in land prices.
Rampant speculation among land dealers and the underlying demand from developers has driven prices by nearly nine-fold since 2007, in specific locations. Upper Hill, within the city and Athi River in Machakos County, have offered the highest returns to investors in land in the nine years.
Land prices in Spring Valley have risen less than four-fold since 2007, making the posh residential neighbourhood the worst performing in value appreciation.
Current asking prices in Spring Valley are about Sh143 million, which is still the most expensive ‘strictly’ low density estates - at nearly three-fold the average prices of Karen, and double the rates at Runda. Prices in some parts of the Nairobi market are comparable to the pricier locations in the biggest cities around the world.