Quarterly property sales prices in Nairobi’s suburbs and satellite towns rose by 0.8 percent, slightly up from 0.7 percent in the third quarter.
On an annual basis, sales prices grew by 5.2 percent in 2024, doubling the growth rate of 2.5 percent seen in 2023. The strong annual growth was supported by a rise in detached house prices, which grew 1.5 percent quarter-on-quarter and 7.5 percent year-on-year.
However, semi-detached and apartment prices faced pressure in the fourth quarter, with declines of 0.8 and 0.6 percent respectively, despite posting annual gains of 0.8 and 1.6 percent.
“Detached units performed strongly both quarterly and annually due to their limited supply relative to other property types. In contrast, the increasing availability of multi-dweller units such as apartments has slowed their price growth,” said Ms. Sakina Hassanali, Head of Development Consulting and Research at HassConsult.
On the rental market, asking prices rose by 0.2 percent in the fourth quarter, reversing the 0.6 percent decline seen in the third quarter. However, annual rental prices were effectively flat at -0.02 percent for 2024, reflecting the challenges landlords faced in raising rents amidst tough economic conditions.
The quarterly recovery in rents was led by Gigiri and Juja, which recorded rental price increases of 6.7 and 6.4 percent, respectively. In the apartment segment, Ongata Rongai and Parklands led with quarterly gains of 3.4 percent and 3.3 percent respectively.
“The recovery in quarterly rental prices coincided with falling inflation, which improved tenants’ purchasing power and gave landlords room to adjust rents upwards,” added Ms. Hassanali. Ridgeways and Loresho posted the highest annual price gains in the suburban house segment at 12.5 and 11.6 percent respectively, while Juja, Kiserian, and Ongata Rongai led among satellite towns with annual growth rates of 12.9, 8.7, and 8.1 percent.
Despite these positive trends, property returns for 2024, comprising capital gains and rental yields, remained below returns from other asset classes. Yields stood at 7.2 percent in suburbs and 5.0 percent in satellite towns, compared to Treasury bill interest rates of between 9.5 and 11 percent.
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