Price of plots on outskirts of Nairobi rises 125pc to Sh18m per eighth of acre

The average price of a one-eighth acre plot in Ruaka, on the outskirts of Nairobi, has more than doubled to Sh18 million in the last one year pressured by road upgrades and new developments including malls.

A new survey by real-estate firm Property Reality Company (PRC) shows the cost of the plots rose by 125 per cent from Sh8 million in September last year.

The Land Index Report, which focuses on areas being targeted by the middle class for acquisition, puts the Ruaka land price rise as the fastest among the areas surveyed with Utawala and Kiserian following.

“The announcement of construction of the Western bypass (from Ruaka to Waiyaki Way) had a lot to do with it,” PRC general manager Abraham Muriithi said.

“But the huge developments coming up in the area like the Two Rivers Mall, Rosslyn Riviera, hotels and other residential estates have turned the area into a hub, which is also key in the price increase.”

The prices of one-eighth acre plots in Utawala have risen by 32 per cent from an average Sh1.1 million to Sh1.45 million during the same period with the area benefiting from the upgrade of the North Airport Road and Eastern bypass.

Average Prices in Kiserian rose by 42 per cent from Sh600,000 to Sh850,000, with Mr Muriithi saying the area is fast developing and will also benefit from the upgrade of the Kiserian-Isinya Road.

Ngong, Kajiado, Mlolongo, Ongata Rongai and Isinya have all seen an average plot price increase of over 20 per cent in the last one year driven by rising demand.

“This (demand) is majorly driven by a growing middle class which has high disposable income and the rural-urban migration across major town centres which places a lot of strain on the limited land available,” Mr Muriithi said.

Lack of affordable mortgage and expensive houses in the market have seen a lot of middle-class households opt to buy plots in Nairobi’s satellite towns and build homes in stages.

This has seen massive growth of areas like Kitengela, Ongata Rongai and Syokimau in the last two decades. The report indicates that Malili and Kamulu did not show any increase in prices while Konza only had a one per cent rise.

The report further shows that cost of land is the most important consideration for buyers followed by genuineness of the title deed and how accessible the area is.

Most real-estate firms allow for payment in instalment with a majority (61 per cent) granting up to three months to clear the amount. Over half of the realtors (61 per cent) offer discounts to cash buyers.