Spring Valley tops in land prices as Kilimani, Ongata Rongai dip
Real Estate
By
Graham Kajilwa
| Aug 01, 2024
Kilimani and Ongata Rongai are the two areas that recorded a drop in land prices in the latest indices by real estate firm HassConsult.
Prices of land in these two areas dropped by 0.3 and 2.6 per cent in the quarter ended June 2024.
Among the 18 suburbs analysed by HassConsult, Spring Valley had the most increase in prices at 5.3 per cent. For satellite towns, Ruiru had the most increase at 4.0 per cent.
Satellite towns land price growth at 2.2 per cent, slower compared to quarter one growth of 3.0 per cent.
Ongata Rongai and Ngong prices this time saw a reversal of fortunes as Juja and Limuru top quarterly growth.
Spring Valley had the most positive change annually among suburbs at 11.9 per cent while Juja has the highest among satellite towns at 20.1 per cent.
The indices show land prices in Nairobi went up by 1.8 per cent as demand for land for commercial development picked up.
Resurgent Upperhill
HassConsult notes that the growth in the quarter was higher compared to the 1.3 per cent reported in the second quarter of the year, partly driven by a resurgent Upperhill where the cost of an acre grew by 3.9 per cent, the fastest quarterly price jump in a decade for the area.
"The resurgence of land price in Upperhill, which posted its fastest quarterly gain since the fourth quarter of 2014 underpins the uptake of remaining current grade A office space formerly oversupplied, as well Upper Hills' recent positioning for successful residential real estate," said Head of Development Consulting and Research at HassConsult Sakina Hassanali.
"The average land in Upper Hill hit its peak of Sh560 million in June 2018, signaling room for valuation gains as demand for commercial and residential real estate in the area gains traction."
In the satellite towns, the indices show the average price per acre rose by 2.2 per cent, down from 3.03 per cent in the first quarter as some of the price growth hotspots showed signs of cooling down.
"The increase in the cost of credit and that of building inputs has negatively affected real returns for developers, limiting the propensity to absorb higher land costs in areas with lower purchasing power," says HassConsult in the indices.
Ngong and Ongata Rongai, which have had some of the fastest-growing land prices over the last three years, were eclipsed by gains in Ruiru, Syokimau and Limuru in the quarter.
Reversal of fortunes
Ongata Rongai was the only one of Nairobi's 14 satellite towns to report a fall in land prices in the second quarter, at negative 2.6 per cent.
"Land pricing in Ongata Rongai and Ngong saw a reversal of fortunes in the last quarter, a signal that the bullish pricing in the previous year is starting to level out," added Ms Hassanali.
Apart from Spring Valley where land prices recorded an increase of 5.3 per cent in the quarter among suburbs, Lavington, Muthaiga and Upper Hill also recorded a shoot.
Prices in Lavington went up 4.2 per cent in the period while Muthaiga and Upper Hill also shot by 3.9 per cent each.
Of the suburbs, only Spring Valley and Lavington recorded a double-digit annual positive price increase at 11.9 and 10.3 per cent.
There is more appetite however among satellite towns as only three towns recorded single-digit positive price changes. These are: Thika, Tigoni and Athi River.
The rest of the 11 towns had a double-digit annual increase led by Juja with 20.1 per cent, followed by Kiserian (15.3 per cent) and, Syokimau (15.2 per cent).
Others are Ruaka (14.3 per cent), Ruiru (14.1 per cent), Ongata Rongai (14.0 per cent), Kitengela (13.3 per cent), Limuru (11.9 per cent), Mlolongo (11.6 per cent), Kiambu (10.7 per cent) and Ngong (10.0 per cent).