It was the Nobel laureate economist Ronald Case who once quipped that “torture data and it will confess to anything”. This week analysts at DataFintech did something with the data, while comparing Karen and Kitisuru real estate markets for 5-bedroom housed and here are some the confessions they got.
The median price for a 5-bedroom house in Kitisuru increased by11.1% between Q3-2016 and Q3-2017 while in Karen it went up by just 4.1%. The increase placed the median purchase price of %-bedroom houses in Kitisuru at KSh. 100milion while in Karen the price increased to KSh. 78million.
In addition, the one year rental yield in Kitisuru was higher at 4.7% compared to Karen at 3.9%.
Of interesting note was the observation that median renting price in Karen declined by 3.6% over the year while in Kitisuru the price went up by 3.6% which indicates a higher demand in Kitisuru than in Karen.
Thus in Karen the median rent increased to KSh. 362,500 or an additional KSh. 13,050 for the tenant while in Karen it dropped to KSh. 270,000 providing a relief of about KSh. 10,083.
In context, the two locations are traditionally high-end markets and may well be some of the most prestigious locations for residential property in the region. With just about 25 kilometres between them, the differences in market dynamics are clear.
The DataFintech recommendation to investors for a 5-bedroom house purchase decision between Kitisuru and Karen is to buy in Kitisuru. Both capital gain and rental yield are higher in Kitisuru than in Karen.