Kileleshwa and Kilimani now Hold 45 Percent of Nairobi's Apartments for Sale
By Estate Cloud - over 2 years ago - Nairobi, Kenya
Residential sales prices remained stagnant in the fourth quarter of 2020 with a drop of 1.2 per cent bringing the annual rise in prices over 2020 to just 0.17 per cent.
Stagnation in price growth over the year was attributed to a fall in apartment prices that fell by 4.6 per cent on average during the past year while both detached and semi-detached houses retained positive price growth. Within the apartment segment,
Kileleshwa and Kilimani saw the biggest quarterly and annual fall in sales prices at 2.6 and 2.8 per cent for Kileleshwa and 9.9 and 8.6 per cent for Kilimani.
As at the end of 2020, Kilimani and Kileleshwa accounted for 28 per cent and 17 per cent of the sales property mix or a combined 45 per cent, effectively making them the source of nearly half of property supply in Nairobi according to HassConsult.
''Against this backdrop, the loading of extra costs onto developers, as soaring land prices and sky-high finance costs, has served in shifting developers to create smaller apartments with lower price tags to allow buyers to continue to access their products at a price that works for both buyer and seller. This shift in supply has led to suburb wide apartment repricing,'' said Ms. Sakina Hassanali, Head of Development Consulting and Research at HassConsult.
In the rental market segment, residential rental prices grew by 1.1 per cent in the quarter, despite a fall in apartment rents of 1.24 per cent in the same period.
Again, apartments in Kilimani showed the strongest fall in quarterly rents at 4.0 per cent followed by Kileleshwa, recording price falls of 2.6 per cent over Q4. The annual corrections amounted to a fall of 9.4 per cent in Kilimani and a fall of 8.4 per cent in Kileleshwa over 2020.
''While smaller apartments dominate the new build market in Kilimani and Kileleshwa and provide middle-income housing at lower ticket prices, the sheer volume of new stock created rental price vulnerability for larger and older stock during the economic slowdown caused by 2020's global pandemic, resulting in rental price corrections,'' said Ms. Hassanali.
A year in review of rental prices showed an uptick of 5.5 per cent in the year and was led strongly by the increasing rental prices for detached houses – up 7.3 per cent in 2020, with Karen and Muthaiga particularly showcasing high-end market resilience to economic slowdowns.