Rental prices for apartments surged up 15.9 percent in the last three months of 2018 at while rent for detached houses declined owing to weak demand.
According to the latest Hass Consult property index, limited home financing options remain the stumbling block for most first time buyers.
Data from the Hass Property Index covering the fourth quarter of 2018 shows significant growth in rent and house sale returns relative to previous years in most residential areas.
The price of land prices in Nairobi and satellite towns recorded fast growth rates in close to a decade, with returns buoyed by growing middleclass and political stability after the infamous handshake.
A parcel of land bought at 1 million shillings in Nairobi’s Kilimani, Kitusuru, Upperhill, Westlands, Runda, Spring Valley, Nyari, Muthaiga, Kileleshwa, Karen, Gigiri, Eastleigh, Donholm, Loresho, Ridgeways, Parklands and Langata ten years ago is now valued at 6.3 million shillings.
During the same period, a one million shillings investment in rental property in those areas has increased to 2.47 million shillings. Hass Consult Head of Development Sakina Hassanali says land in Nairobi has appreciated by 700 percent in the last ten years outperforming global asset classes that include both Gold and Oil.
The report indicates that Syokimau and Nyari are the cheapest areas to rent an apartment or house respectively.
Hassanali says developers of large-sized family apartments have felt the pinch more as a glut in the segment has meant tenants with larger disposable income have more options to choose from.