Land prices in Nairobi’s satellite towns grew at the slowest pace since June 2023 as a tough economic environment stifled demand.
The average cost of an acre of land satellite towns rose by 1.9 percent in the period, down from 3.02 percent in the previous quarter and the slowest rate of expansion since the 1.22 percent seen six quarters ago.
Nine out of the 14 towns tracked recorded a deceleration in price expansion, led by Thika and Mlolongo where growth fell from 6.3 percent and 6.6 percent in the third quarter to 0.9 percent and 1.1 percent, respectively, in the fourth quarter.
Kiambu (-0.3) and Ngong (-0.2 percent) recorded negative growth, while notable declines were also seen in Ruiru (4.9 to 3.2 percent), Syokimau (4.8 to 3.4 percent) and Kiserian (4.7 to 2.0 percent).
Satellite towns have in previous quarters seen impressive growth driven by both private and commercial property developers, but a tough economy which came with job losses, and high interest rates have impacted would be land buyers.
“Periods of economic uncertainty and slowing GDP growth can lead to some developers putting off decisions to acquire land, thus reducing demand which drives prices higher,” said Ms. Sakina Hassanali, Head of Development Consulting and Research at HassConsult.
“It also shows that the infrastructure-led price boost in areas such as Thika, Kiserian, Mlolongo, and Syokimau is starting to wane, given the sharp price jumps of previous quarters.”
The increase in prices in the suburbs remained steady at 1.7 percent, compared to an increase of 1.6 percent in the third quarter. Suburb price gains were led by Parklands (3.4 percent), Upperhill (3.3 percent), Spring Valley (3.1 percent), and Kileleshwa (3.0 percent).
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