Land prices in satellite towns hit record high, shows report

Property prices increased across the board at 3.3 per cent over the quarter. [iStockphoto] Nairobi's satellite towns experienced a record increase in land prices in the second quarter of the year, new data by real estate firm Hass Consult shows. The towns recorded a 4.1 per cent growth overshadowing a 0.17 per cent increase in the prices of land in the city. The Hass Property Index shows that all satellite towns posted "all-time high asking land prices, with the exception of Athi River and Limuru." "Tigoni displayed the highest gains with land prices increasing by 6.65 per cent over the quarter while Juja has increased a significant 20.9 per cent over the last year," said the report. "Land prices in Nairobi remained contrastingly steady with only high-end, low-density suburbs of Loresho, Spring Valley and Nyari showing positive growth at 3.5, 3.4 and 2.1 per cent respectively." Head of Development Consulting and Research at HassConsult Sakina Hassanali said demand around the city is being driven by emerging opportunities in retail, manufacturing, and logistics needed to serve the rapidly urbanising towns as well as the capital city. Investments in infrastructure over the last few years have further encouraged these new opportunities, she added. "We have witnessed a resurgence in land activity in the satellite towns attributed to an expansion of services in the wider Nairobi area, owing to infrastructure upgrades, a growing population as well as the influx of international interests looking to create a regional base in Nairobi," said Ms Hassanali. "Sh1 million invested at the end of 2007 would have been worth Sh10.21 million if invested in land in Nairobi Satellite-14, Sh6.33 million if invested in land in Nairobi suburbs -18, Sh2.61 million if invested in property (The Hass Sales Composite Index, All Properties), Sh3.24 million if invested in bonds, Sh1.49 million if invested in savings and only Sh0.29 million if invested in equities," she said. Property prices also increased across the board at 3.3 per cent over the quarter - the third consecutive quarter to post strong market growth, according to HassConsult. The last time such a price rise was witnessed was in 2016. However, rising cost of building materials is expected to affect property pricing of new buildings coming into the market in 2023. In the year, landlords' inflation-adjusted rents across all properties resulted in a 1.1 per cent increase over the quarter, with apartments seeing the biggest jump at two per cent. "The net effect of property prices and rents jointly moving up means total properly returns (capital gains and rental yields) are now up 16.26 per cent per annum, currently placing property at the helm of investment returns," the report indicated. "While inflationary trends have pushed rental pricing up, consumer purchasing power will be affected with real incomes reducing. Suburbs with insufficient housing supply will absorb the rental price rises as tenants lack suitable alternatives," said Ms Hassanali.

Land prices in satellite towns hit record high, shows report

Get Full Access for Ksh299/Week.

Related Topics

Similar Articles

Latest Stories

The Standard Insider

Digger Classified

GET OUR NEWSLETTER

CONNECT WITH US

FOR THE LATEST JOB ADVERTS

Similar Articles

Title deed insurance key to safeguarding property of Kenyans

Turkish firm picks Kenya as East Africa base in growing trade push

How market-driven toilets are turning sanitation crisis into a business

Credit Bank digitises Bid Bond access

DIGGER JOBS

Digger Motors

Digger Real Estate

Land prices in satellite towns hit record high, shows report

Get Full Access for Ksh299/Week.

Related Topics

Similar Articles

Latest Stories

The Standard Insider

Digger Classified

GET OUR NEWSLETTER

CONNECT WITH US

FOR THE LATEST JOB ADVERTS