House prices in Nairobi have continued the upward trend to record a 4.2 per cent growth in the first quarter and 14.6 percent increase over the year; the first double digit annual growth rate since 2011.
Hass Consult recently unveiled property price trends for the first quarter of 2016, showing upward trend in house prices, while rents remain relatively subdued.
Addressing the press at a Nairobi hotel, Hass Consult Research and Marketing Manager Sakina Hassanali said that this is the very first time the market has shown a double digit annual growth in five years.
“There has been increased demand for residential property since the beginning of the year, enhanced by the poor performance of alternative asset classes such as stocks. Investors are also shying away from assets such as fixed deposits in light of the perceived turmoil in the financial sectors.” Ms Hassanali said.
She also cited rents in Nairobi rebound by a marginal 1.5 per cent in the first quarter attributable to growth in suburbs that are characterised by detached and semi-detached houses across the market thus recording a sharp rent increment of 1.3 per cent over the last quarter and 17.1 per cent over 2015.
Hassanali added that the increased supply of apartments continues to suppress rents in areas dominated by investors with Westlands reporting a 2.5 per cent drop in rental asking prices and Syokimau reporting a drop of 2.3 percent.
HassConsult has also unveiled land price trends for the first quarter of 2016, showing a marginally drop of the Nairobi 18 surburbs at 0.2 percent attributed to a shift into satellite towns by land investors.
“The highest fall in land value was experienced in Easteleigh at 7.5 percent followed by Ridgeways, Kileleshwa and Nyari at 2.4 percent, 2.2 percent and 2.0 percent respectively”, Hassanali said.
Hassanali noted that land acquisitions in Nairobi now consist primarily of developers devoted to build high density residential, commercial and retail properties that boost development profits.”
She however, pointed out that some areas in Nairobi jumped the trend recording sharp price rises giving an example of Donholm’s land price which rose at 9.3 percent in the quarter saying that land continues to outperform other commodities.
Hassanali added that investment in land also runs ahead of annualised stocks and bond returns, rendering it the most stable investment option with highest yields over seven years.