HassConsult has released the Hass Property price index for the first quarter of 2024, showing a 2.7 percent growth in asking prices across all properties in the period despite high-interest rates that have raised financing costs for developers and buyers.
Although the growth was slower than the 4.1 percent reported in the fourth quarter of 2023, a positive trajectory indicates the property market retained its resilience, even as banks raised their loan rates above 20 percent after the Central Bank of Kenya (CBK) increased its base lending rate.
A stronger shilling (by 17 percent year-to-date) also subdued foreign investment. Ridgeways and Loresho led suburbs in quarterly price expansion at 2.9 percent and 2.7 percent respectively, while in satellite towns, the top performing areas were Juja at 3.4 percent, Ngong at 2.7 percent, and Limuru at 2.2 percent.
“The rise in asking prices moderated in the first quarter of the year as credit conditions tightened following the increase in the CBK’s base lending rate to 13 percent, which has had the effect of sweeping liquidity from the market,” said Ms. Sakina Hassanali, Head of Development, Consulting and Research at Hass Consult.
On the rental market, prices went up by 0.4 percent in quarter one of 2024, slowing from 2.5 percent in the fourth quarter of 2023. In Nairobi’s 18 suburbs and 14 satellite towns, only Muthaiga and Ridgeways reported falling rental prices in the quarter. All the others managed to increase their asking rents, albeit on a smaller scale compared to the previous quarter.
“Although inflation has fallen since the beginning of the year, the economy remains generally subdued, muting growth in rental yields to 6.9 percent in March from 6.7 percent in December 2023,” added Ms. Hassanali. Tenants in the rental market also considered other factors such as accessibility and convenience when choosing where to live.
For this reason, Westlands, which is served by a good road network and has emerged as the most attractive business district in the city, reported a 5.8 percent increase in asking rent, outperforming all other suburbs.
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