Land prices in Kiambu satellite towns have gone down significantly over the third quarter of this year mainly driven by investor caution following stringent administrative measures, with Limuru hardest hit.
Kiambu County, whose satellite towns have been stellar performers on both an annual and a quarterly basis, recorded drops in land prices attributed to the effect of an earlier proposal to control land use by the county government.
In June this year, Kiambu County under former governor William Kabogo announced a new plan backed by international partners to regulate land use to boost food security.
Many farmers have subdivided their land and either sold it to real estate developers or used it to invest in real estate themselves.
The continued loss of agricultural land to real estate prompted the Kiambu government to adopt spatial planning to ensure food security.
The seven Kiambu County satellite towns that recorded land price drops include Limuru which recorded the highest land price drop at 5.7 per cent, Juja at five per cent, Ruiru 3.5 per cent, Kiambu Town 1.8 per cent, Tigoni 1.7 per cent and Thika with the narrowest drop of 0.6 per cent.
The drops registered a spillover effect on the neighbouring Kitisuru and Ridgeways suburbs, which recorded a 1.9 per cent and 2.2 per cent drop respectively.
“Land for real estate commands a significantly higher price than land meant for agricultural use. Policies that prevent the change in land use from agriculture to real estate will therefore adversely affect land prices,” said Ms Sakina Hassanali, head of development consulting and research at HassConsult.
“Investors are therefore holding back on buying land in satellite towns in Kiambu County until they are certain that purchases will not be affected by the proposed policies on land use.”
On the contrary, Nairobi’s 18 suburbs recorded a 0.4 per cent increase in asking prices over the quarter.
Kilimani was the best performing area with prices up 2.5 per cent while Lavington witnessed a land price correction of 2.6 per cent over the same period.
“Land prices in Nairobi reported a marginal increase in asking prices despite uncertainty in the political environment which had a negative effect on property prices in the city’s suburbs,” said Ms Hassanali.
On an annual basis Langata was the best performing suburb with an 8.5 per cent increase in the asking price while Ridgeways was on the tail end with a 0.5 per cent drop.