HassConsult has released its Hass Property Price Index for the second quarter of 2024, revealing a modest 1 percent increase in property sales prices across Nairobi.
This growth, while slower than the previous quarter’s 2.7 percent, marks the eighth consecutive period of price increases, highlighting a trend of stability in the property market.
The recent data illustrates that, despite high interest rates and a strengthened shilling impacting foreign buyer advantages, property sales prices have continued to rise albeit at a lower rate.
“While higher interest rates on mortgages don’t have a significant impact on market-wide property price movements due to the low mortgage participation in the country, the rise in rates has the effect of reducing market liquidity in general resulting in a dampening of demand. So far, the property market has shown resilience with price stability still being witnessed across most areas,” said Ms Sakina Hassanali, Head of Development, Consulting, and Research at Hass Consult.
In terms of price growth, Nairobi’s satellite towns outperformed its suburbs with an average increase of 2.1 percent increase compared to a 0.9 percent decrease in the suburbs. This rise in satellite towns can be attributed to accelerated urbanization, which has bolstered demand and pushed up asking prices.
Rental prices experienced a slight increase of 0.01 percent in the quarter. Property owners are cautious about raising rents to retain tenants amid higher taxes and inflation, which has constrained disposable income. Rental yields differ significantly between Nairobi’s suburbs and satellite towns.
In the suburbs, the average yield increased to 7 percent by the end of June from 6.9 percent in March. Conversely, rental yields in satellite towns decreased slightly from 4.9 percent in March to 4.8 percent in June, reflecting varying market conditions in these areas.
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