The property market in Nairobi is grappling with static sales unit price performance that is attributable to excess supply of apartments in Kilimani and Kileleshwa.
In the last one-year apartment prices in Killimani shed 9.5 percent even as neighbouring Kileleshwa saw unit prices lose 6.9 percent in value.
The drop in apartment prices in Kilimani was the highest in house prices surveyed by property tracker Hass Consult in the second quarter.
Houses in Langata posted atypical property price movements of an increase of 4.1 percent in the quarter and 10.3 percent in the year in a market that is currently driven by affordability.
In the quarter, Langata reported the cheapest price point for city houses at Kes34.5 million.
Langata’s favourable rating was attributable to the surburb’s proximity to the city centre as well as access to vast transport links including the southern bypass and the Nairobi Expressway.
“At a time when economic stagnation has largely riddled the middle market with salary cuts, unemployment and small business burnout, properties with lower ticket prices but still within the city are becoming an attractive investment,” said Ms Sakina Hassanali, Head of Development Consulting and Research at HassConsult.
On the rental front there was a mild improvement of 1.1 percent over the quarter as the market slowly shows moves to recovery.
Rental prices in Donholm edged up 5.7 per cent, Muthaiga 5.5 per cent, while customers in Kilimani saw rent costs move up 2.2 per cent in the three months to June.
This was heavily backed by the increase in rental prices of detached houses up 3.4 percent in the quarter, symptomatic of the people within large international and multinational organizations who continue working from home and whose elimination of mobility costs have enabled higher housing budgets, noted HassConsult.
However, affordability still appears to be driving the apartment rental market. Riverside Drive, a suburb that registers the highest apartment rents at an average Kes170,200 saw the highest rent price corrections at a loss of 2.8 percent in the quarter, while Langata whose average apartment rents are half the next best option registered a 2.9 percent increase over the quarter and 12.9 percent over the year.
Apartment Price Trends by Suburb Nairobi
|Suburb||Sales Prices – Annual % change||Rent Prices – Annual % change|
Source: The Hass Property Index