Land prices increase in Nairobi suburbs

The HassConsult property index has unveiled fourth quarter of 2016 prices indicating an increase in land prices in Nairobi suburbs.

According to the real estate Company, the price has increased by a marginal of 0.8 percent in the fourth quarter and 5.1 percent on an annual rate.

Head of Research and Marketing Hass Consult Sakina Hassanali says that subdued performance can be attributed to the slow growth in credit as a result of the interest rate cap law which has failed to live up to market expectations.

“In the last quarter the market was optimistic that the interest rate cap law would result in advancing more affordable credit which was expected to increase loan uptake and spur the property market”, said Ms. Sakina.

She clarified that unfortunately the expectations were not witnessed as commercial banks are more cautious in lending and this continues to hamper the potential growth in Nairobi’s property market.

The lead pack land prices in Nairobi Gigiri increased by 3.13 percent while Donholm was the best performing suburb in 2016 with prices increased by 29.3 percent.

The worst performing suburb was Nyari recording an average asking price decline of 0.64 percent over the last quarter whereas Eastleigh recorded the worst annual performer at a price decline of 5.58 percent.

“Land in satellite towns is more affordable than in the City and buyers tend to be long-term investors and speculators who are fuelling the steady price appreciation”, added Ms. Sakina.