Satellite towns post slow growth as homeowners are priced out

A section of Juja town in Kiambu, on Thursday, July 16 2020.Most businesses that rely on students from the university for business have adversely been affected as all learning institutions are shut owing to Covid-19 pandemic. [David Njaaga,Standard] Land prices in Juja, Kiambu County, grew the fastest in the last 12 months among Nairobi city's satellite towns, even as the latest HassConsult Property Indices show developers in these areas are slowing down due to oversupply of apartments. Tough economic times, the indices show, have caused both private home developers in these areas and commercial ones to slow down. Private home developers have slowed down due to land prices in the area growing beyond their affordability, while commercial residential developers are cooling off due to an oversupply of apartments in the area. Kiserian, Kitengela, Ngong, Ongata Rongai, Juja and Thika are the listed satellite areas where developers have noted an oversupply. An acre of land in Juja now averages Sh25.1 million, Sh28.6 million in Ongata Rongai, Sh36.9 million in Ngong, Sh30.1 million in Thika, and Sh13.0 million in Kiserian. In the quarter, Thika (-0.2 per cent) and Kiambu (-0.4 per cent) are the two satellite towns that recorded a drop in land prices. Prices of apartments The largest increase in asking prices for land in the satellite towns was in Juja, which went up 3.6 per cent, followed by Kiserian 2.8 per cent and Athi River 2.4 per cent. The indices for the second quarter of the year (Q2) show that only three of the nine satellite towns recorded a positive growth in the asking prices of apartments. These are Athi River (1.2 per cent), Mlolongo (1.4 per cent) and Syokimau (1.4 per cent). The rest recorded a drop with Kitengela having the steepest dip of -2.4 per cent, followed by Ongata Rongai -1.9 per cent, Ngong -1.6 per cent, Thika -1.2 per cent, Ruaka -0.8 per cent and Kiambu -0.4 per cent. From the breakdown, the asking prices of apartments in Kitengela and Thika recorded a drop of -2.9 per cent in the 12 months to the end of the quarter. Ruaka dropped by -3.6 per cent as Kiambu fell by -1.1 per cent. HassConsult says as the economic conditions become tougher for the middle and upper middle class, the previously high demand for land in Nairobi's outlying areas, where prices were within reach of private home developers, is waning. This has led to lower growth in areas such as Kiserian, Kitengela, Ngong, Ongata Rongai, Juja and Thika. "Developers are also keeping an eye on potential oversupply of apartments in these satellite areas, which has started to manifest in stagnant rental prices and falling sales prices for units in a majority of the towns," said Co-Chief Executive and Creative Director of HassConsult Sakina Hassanali. Of the nine satellite areas, Mlolongo had the most increase, 3.4 per cent, in asking rental prices. It is followed by Syokimau 3.9 per cent, Athi River 3.4 per cent and Ngong 2.9 per cent. Property prices Asking rental prices for apartments in Thika dropped by -0.8 per cent. The indices report that during the period, property prices rose by 3.75 per cent, compared to a growth of 2.45 per cent in the first quarter of the year. On an annual basis, property prices rose by 7.8 per cent, compared to 4.9 per cent in the 12 months to March 2025. HassConsult found that the detached housing segment, which is made up of townhouses and villas, was the most vibrant in price growth at five per cent, outpacing semi-detached units and apartments, which grew at 1.3 and 1.1 per cent respectively in the quarter. "Detached house prices grew at their fastest quarterly pace in nine years, which also reflected in suburbs such as Muthaiga, Karen and Runda-that are largely exclusive of apartments- reporting faster property price growth," said Ms Hassanali. "There is a general lack of supply of detached houses, leading to the increased prices." The indices show land prices per acre in Nairobi's suburbs rose by 1.6 per cent in the second quarter, slightly slower compared to a growth of 1.7 per cent in quarter one. This is while the satellite towns saw their prices appreciate by 1.25 per cent, slowing down from a growth of 2.4 per cent seen in the previous period. All 18 suburbs surveyed in Nairobi returned positive price movement in the quarter, the indices show. However, Spring Valley (2.3 per cent) and Parklands (2.2 per cent) were the only two suburbs with a price gain of more than two per cent. In contrast, eight suburbs achieved land price growth of more than two per cent in the first quarter, led by Spring Valley at 3.7 per cent. "The Nairobi suburbs have shown consistency in price movement, allowing them to overtake satellite towns in quarterly price growth for the first time in five years. Demand for standalone house units also bodes well for land prices in low-density estates, complementing the city's bright apartment development hotspots," said Hassanali.

Satellite towns post slow growth as homeowners are priced out

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