The Nairobi property market is showing signs of a slowing growth as developers shift to city outskirts where bigger and more affordable land is available.
According to data from the Nairobi City Council (NCC), new building plans worth Sh54.8 billion were approved within Nairobi in Q4 of 2011, which was 11 per cent lower than Q3.
Although the decline can also be attributed to the rising interest rates during the period, City Hall says it expects a slowdown in the number of new construction projects within Nairobi after depletion of land in city suburbs such as South B, South C and Lang’ata.
“We have exhausted land in areas that would handle major housing projects towards the South of Nairobi and now most projects are coming up in satellite towns (where land is cheaper),” said NCC director of planning Tom Odongo.
The selling price for an acre of land in estates such as Kileleshwa and Kilimani is as much as Sh200 million – an amount that is way out of reach for many Kenyans.
“Doubts about ownership of land in areas such as Embakasi are pushing investors outside Nairobi, to avoid burning their fingers,” he said.
Mr Odongo said Thika, Kiambu and Kajiado are the main towns that have benefited most from the scarcity of land in the Nairobi, citing their proximity to the city and the availability of more affordable expansive parcels of land in the towns.