Land prices in Nairobi suburbs and satellite towns, are cooling off as market players sit in watch over the government’s direction on the affordable housing policy.
According to the HassConsult Land Price Index for the third quarter of 2018 released yesterday, on average the price of land in Nairobi rose 0.24 per cent during quarter two of the year, compared to an increase of 0.4 per cent for the same quarter in 2017.
Land in satellite towns however saw a slightly higher increase of 0.59 per cent over the quarter compared to a 0.5 per cent drop recorded in the preceding quarter of 2018.
The slow growth in land prices over the quarter was attributed to a cautious approach by investors who are waiting for more granular details of the Government’s plans to put up 500,000 affordable units in the next four years under the Big Four Agenda, before making a move.
“The Housing department has stated that it will among other initiatives invest in infrastructure in certain suburbs and satellite towns as well as develop some of its land holdings. These actions could potentially tilt the market as historically investors often follow where new infrastructure is being put up,” said Hass Consult’s Head of Development Consulting and Research Ms. Sakina Hassanali.
Ridgeways was the best performing suburb over the third quarter with prices in the area increasing by 2.92 per cent while Mlolongo was the best performing satellite town with a 3.99 per cent increase over the same period.
At the tail end among the suburbs was Donholm with prices dropping by 0.89 per cent over the quarter while in the suburbs Kitengela posted a 1.71 per cent decline. These two areas are experiencing a correction having previously posted strong returns.
Upper Hill continues to have the most expensive land at KSh. 558.3 million per acre while Kiserian the least expensive land at Ksh7.1 million per acre. Ms. Hassanali added that there was need for the housing department to leverage on the wealth of experience from the private sector which has historically rolled out housing units across all market segments.