Land prices in Nairobi’s satellite towns have started to fall after a sharp rise in recent years. The price increase was largely driven by infrastructure upgrades like the Thika Super Highway, South, East and Western Bypasses and the Nairobi Express Way.
The Hass Land 2024 fourth quarter price index released Wednesday shows that prices in 9 out of 14 satellite towns grew at the slowest pace since June 2023 as a tough economic environment stifled demand.
According to the report, the average cost of an acre of land in satellite towns rose by 1.9 per cent in the period, down from 3.02 per cent in the previous quarter and the slowest expansion rate since the 1.22 per cent seen six quarters ago.
“Nine out of the 14 towns tracked recorded a deceleration in price expansion, led by Thika and Mlolongo where growth fell from 6.3 per cent and 6.6 per cent in the third quarter to 0.9 percent and 1.1 percent, respectively, in the fourth quarter,’’ the report reads.
Kiambu and Ngong recorded negative growth of 0.3 and 0.2 per cent respectively. In comparison, there were notable declines in Ruiru from 4.9 to 3.2 per cent, Syokimau ( 4.8 to 3.4 per cent) and Kiserian ( 4.7 to two per cent).
An acre piece of land in Kiambu is now going for Sh49.6 million, Ngong Sh35.9 million; Ruiru Sh35.6 million while the same is going for Sh12 million.
Ruaka still ranks as the most expensive place to acquire land in those satellite towns despite the drop, with an acre going for Sh111.2 million.
Satellite towns have in previous quarters seen impressive growth driven by both private and commercial property developers, but a tough economy which came with job losses, and high interest rates has impacted would-be land buyers.
“Periods of economic uncertainty and slowing GDP growth can lead to some developers putting off decisions to acquire land, thus reducing demand which drives prices higher,” said Sakina Hassanali, head of Development Consulting and Research at HassConsult.
“It also shows that the infrastructure-led price boost in areas such as Thika, Kiserian, Mlolongo, and Syokimau is starting to wane, given the sharp price jumps of previous quarters.”
The increase in prices in the suburbs remained steady at 1.7 per cent, compared to an increase of 1.6 per cent in the third quarter.
Suburb price gains were led by Parklands ( 3.4 percent), Upperhill ( 3.3 percent), Spring Valley ( 3.1 percent), and Kileleshwa ( 3.0 percent).
Upper Hill remains the most expensive place to acquire land in Nairobi, with an acre going for Sh522.7 million followed by Westlands at Sh487.3 million and Parklands at Sh448.7 million.
Even so, property sales prices rose by 0.8 per cent in the fourth quarter of 2024, compared to a growth of 0.7 per cent in the third quarter, while annual sales prices grew by 5.2 per cent in 2024, doubling the growth rate of 2.5 per cent in 2023.
Detached houses led the market
with price growth of 1.5 per cent
quarterly and 7.5 percent annually, while semi-detached houses
and apartments had mixed performance, with quarterly declines
of 0.8 and 0.6 percent but annual
growth of 0.8 and 1.6 per cent respectively.
