Land prices fall sharply in wake of Covid-19 pandemic

Land prices in Nairobi’s satellite towns fell 1.1 per cent in 2020 compared to a 6.93 per cent growth in 2019 – injecting some common sense back to an overheated market, according to the latest figures by property firm HassConsult.

The Hass Property Index shows Kiambu town had the sharpest correction of 11.4 per cent, followed by Ruiru and Limuru, where prices fell by 6.0 per cent, and 3.0 per cent respectively in the last 12 months after years of speculative land buying events.

Syokimau, a hot property market outside Nairobi, posted a 2.6 per cent drop in land value.

In the past ten years, real estate investors have flocked to Kiambu County – attracted by massive infrastructure projects – acquiring huge parcels of land cheaply for subdivision and further speculation.

“However, land prices in the county are moving towards a maximum of what the development market can bear,” HassConsult’s Head of Development Consulting and Research Sakina Hassanali said on Wednesday.

READ: Nakuru land prices jump 9,900pc in just four years

The report further highlighted that land prices in Nairobi suburbs fell 2.56 per cent last year compared to a 1.69 per cent growth in 2019 as the apartment market contracted due to coronavirus-induced economic hardships.

Parklands area posted the highest annual price drop in land prices at 7.35 per cent followed by Riverside at 7.2 per cent. Both areas are dominated by a huge number of apartments.

The analysis suggested that a quick bounce back in the city land prices was unlikely, with a sluggish recovery more realistic in the mid-term future as the economy picks up.

“Until we see a revival of the apartment market which at the end of the day is a function of economic growth, land prices in the inner city will remain stagnant,” Ms Hassanali said.

READ: Marsabit land prices hit Sh80m mark as builders flock to town

Upper Hill, however, remains Nairobi’s most expensive suburb with an acre going for Sh509,900,000 – a 5.4 per cent drop compared to the asking prices of 2019. It is followed by Westlands where an acre goes for Sh420,200,000, and Kilimani at Sh413,800,000.

Land prices in Westlands and Kilimani fell by 0.5 per cent and 2.9 per cent respectively.

Some realtors are offering discounts as a means to encourage people to buy land during the pandemic. Others are allowing buyers to pay in instalments that suit their pockets.  

Buying guide

• In 2020, the most expensive suburb of Nairobi was Upper Hill, with a price of Sh509,900,000 per acre, followed by Westlands at Sh420,200,000, and Kilimani at Sh413,800,000.
• In the same period, Nairobi’s cheapest suburb was Karen with an estimated price of Sh62,300,000 per acre, followed by Lang’ata at Sh63,700,000 and Donholm at Sh70,800,000.
• Ruaka remained Nairobi’s most expensive satellite town with an acre going for Sh90,000,000, many miles ahead of Kiambu town at Sh38,600,000 and Mlolongo at Sh28,600,000.
• On the other hand, Kiserian was the cheapest satellite town at Sh7,700,000 per acre, followed by Kitengela at Sh12,600,000 and Athi River at Sh13,900,000.

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