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Tenants spared sharp rental increases on harsh economic times

Artist's impression of Lurambi Affordable Housing Program

Consumers living in Nairobi and its environs experienced marginal increase in rent in the first quarter of the year due to high inflation according to Hass Consult.

According to Hass Property Index, rental prices went up by 0.4pc in quarter one 2024 after slowing from 2.5pc in the fourth quarter of 2023.

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Asking rent for detached houses rose by 0.1pcs, apartments by 1.4pc while semi-detached houses experienced a 0.3pc decline in asking rent.

The index shows that while there was slight increase in rent in most satellite towns, only Ruaka and Kiambu apartments experienced rental reduction of 0.4pc each between the fourth quarter of 2023 and first quarter of this year to March.

Towns where landlords hiked rental prices for tenants marginally include Ruiru, Tigoni, Limuru and Kiserian where rent surged by 0.1pc, 0.2pc, 0.3pc and 0.8pc respectively.

Higher rental hikes was reported in Thika, Mlolongo and Kitengela where the price of renting an apartment went up by 6.3pc, 4.1pc and 7pc respectively.

Hass Consult says in Nairobi’s 18 suburbs and 14 satellite towns, only Muthaiga and Ridgeways reported falling rental prices in the quarter. All the others managed to increase their asking rents, albeit on a smaller scale compared to the previous quarter.

“Although inflation has fallen since the beginning of the year, the economy remains generally subdued, and muting growth in rental yields to 6.9pc in March from 6.7pc in December 2023,” said Hassanali.

When choosing a place to rent, the firm says tenants in the rental market considered other factors such as accessibility and convenience, a factor which saw Westlands, which is served by a good road network emerge as the most attractive business district in the city, reported a 5.8pc hike in asking rent followed by Loresho at 3.2pc and Nyari Estate at 3pc.

On the property sale index, the firm reported a 2.7pc increase in prices for the first quarter of 2024 after slowing from 4.1pc reported in the last quarter of 2023 on account of high interest rates.

“The rise in asking prices moderated in the first quarter of the year as credit conditions tightened following the increase in the CBK’s base lending rate to 13 percent, which has had the effect of sweeping liquidity from the market,” added Hassanali.

Ridgeways and Loresho led suburbs in quarterly price expansion at 2.9pc and 2.7pc respectively, while in satellite towns, the top performing areas were Juja at 3.4pc, Ngong at 2.7pc and Limuru at 2.2pc.

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