Nakuru City has been recording significant growth in demand for apartments compared to owner-occupier or single-family residential houses and offices.
The move is attributed to the growing demand for more housing units in the country’s newest city and rising population, coupled with high prices of land.
The apartments have been concentrated in upmarket areas of Milimani, Kiamunyi and Naka, while others have started coming up in middle-income-estates of Freehold and Shebab Estates within the city.
And in some areas of the city, homes and mansions sit on expensive and expansive land.
The combination of monthly mortgage, insurance, maintenance and repairs and property tax payments are at times higher than monthly rental costs.
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Interestingly, the land to construct owner-occupier homes is diminishing faster, owing to a booming population in the city. This has given rise to high-rise rented apartments.
Buildings and land in the area have also appreciated in value after Nakuru was made a city.
For instance, a piece of land measuring 50 by 100 that used to cost Sh350,000 two decades ago at the Kenya Industrial Training Institute (KITI) Estate on the side bordering Milimani Estate now goes for Sh4 million at the current market rate.
The same trend has extended to other residential estates of Kiamunyi and Naka.
Appreciation in value
In the city, apartments are good investments worth millions or billions of shillings that are at times sold out after renovations by the owners, following the appreciation in value.
Jojean Real Estates Consultants Managing Director Sammy Kiguru said rural-urban migration has led to the mushrooming of apartments in the outskirts of the city in places like Kiamunyi, Pipeline and Barnabas Estates besides the normal affluent Milimani and Naka areas.
“Most of them are high-rise apartments built in the latest stylish architectural standards,” he said.
Mr Kiguru said modern apartments are built off the town attracting high rents. The main challenge, he notes, is the lack of water and sewer systems in areas like Kiamunyi, Pipeline and Barnabas.
Rents of such apartments range between Sh20,000 to Sh35,000 monthly depending on their location from the city centre, according to Kiguru whose experience in real estate management spans over three decades.
“These apartments have different rent rates depending on their location from the city centre. Obviously, they are expensive and the people who can afford them are affluent in the society,” he said.
The De-Negotiators Enterprises Managing Director Elly Ogutu said most occupants of these apartments are new city residents from different parts of the country.
Most of them are new business people and the upper working class employed either in the Civil Service, parastatals, banks or multinationals companies.
“These are a high-class of people who are keen on their security. It is the reason they like living in apartments where 24-hour security surveillance is always guaranteed,” said Ogutu.
And owning a home also influences how an individual views the role of government in the housing sector according to Ogutu.
In the Western world, when housing prices rise, individuals are more critical of the welfare State.
Conversely, when housing prices drop, homeowners are more likely to favour government intervention.
In the US, areas with high rates of home ownership have higher levels of voter turnout.
And home ownership has been encouraged by governments in Western countries because it was thought of as a way of helping people acquire wealth, encourage savings and promote civic engagement.
However, the housing market crash of 2008 caused academic and policy-makers to question this logic according to Elemens Gardens General Manager Dr Fredrick Juma, who is also a lecturer at Egerton University.
Dr Juma said some of the wealthy people who feel insecure in their owner-occupier houses are the ones who end up in rental apartments.
“They would rather surrender part of their privacy for their own security as opposed to their owner occupier houses where they are very exposed to so many things,” he said