Nakuru middle class migrate to the suburbs for cheaper houses
A part of Section 58, a middle income estate in Nakuru, where rents have doubled, leading to a migration to the suburbs. File
What you need to know:
Two-bedroomed houses are now costing upwards of Sh2.5 million from Sh1.2 million due to higher cost of materials.
Due to increased demand, Mr Muigai says developers are now shifting their investments away from the CBD.
There is a migration in Nakuru similar to the urban-rural phenomenon. People are moving to far-flung residential areas claiming that rents have shot up in estates near the town centre.
This movement will help to open up these areas to development, say residents and property developers, who add that housing demand is growing faster as the cost of living rises.
Until 2010, rent for a two bedroomed house within the town’s middle-class estates such as Freehold, Racecourse, Shabab, London, Kiamunyi, Section 58, Satellite, White House and Upper Mwariki was Sh6,000 while a one-bedroomed house went for Sh3,000.
The most expensive bedsitter then was Sh2,000, depending on location; today that rent has doubled. A newly built, tiled house in these estates rents for between Sh8,000 to Sh12,000 while others cost an average of Sh6,500.
At Satellite estate, which is about three kilometres from the central business district, a one bedroomed house that rented for an average of Sh6,000 in 2012 now goes for Sh8,500. A two bedroomed house that rented for Sh8,000 is now Sh12,000.
Real estate agents say tenants have opted to move to estates where rent is cheap, creating demand in the outskirts and giving the suburbs a new face.
“Remember income is constant and the rents are going up consistently. There is no way a middle class tenant can afford the expenses unless he has a housing allowance or extra income,” says Mr Gilbert Kabage, the managing director of Pata Commercial Enterprises.
Places such as Mawanga (3km from the CBD), Maili Sita (10km), Mbaruk (15km), Lanet (7km), Lower Mwariki (4km) and Pipeline (10km) have become highly attractive residential estates.
In these areas, which were mainly under crop production with a sprinkling of rental houses, a one-bedroomed house goes for between Sh3,000 and Sh4,500 while two-bedroomed units go for a maximum of Sh8,000.
“The demand is now in the outskirts of Nakuru town. People are struggling to keep rent low as salaries have remained the same and the cost of living has gone up. The best way to survive is to go for a house far from the city centre, which they can afford,” says Simon Mureithi, the branch manager of Muigai Commercial Enterprises.
Due to increased demand, Mr Muigai says developers are now shifting their investments away from the CBD. “Places like Maili Sita and Mawanga are becoming the new suburbs because this is where the demand is.”
Overtime, the dynamics in the county’s real estate has changed with the cost of land rapidly going up. The prices of construction materials have also increased and the county government has adjusted its land rates upwards while introducing other construction levies.
In 2012, a 100 by 50 plot in Section 58 went for Sh800,000. The current price is Sh3 million. In Kiamunyi, similar sized plots cost Sh300,000 but now those near the highway go for Sh1.6 million while those farther inside cost between Sh800,000 and Sh1.2 million.
This, according to the developers, has influenced how landlords charge rent.
By 2007, the developers say construction of one-bedroomed houses cost between Sh700,000 to Sh850,000 against the current expenditure of Sh1.5 million to Sh1.8 million. Two-bedroomed houses are now costing upwards of Sh2.5 million from Sh1.2 million due to higher cost of materials.
This reflects the trend across the country where the price of land, cost of materials, and artisans’ charges have killed many dreams of owning a home.
“The land rates have also been increased from Sh4,000 to Sh6,000. When the landlord adds all these up, he has no choice but increase the rent by almost 50 per cent,” says Mr Kabage.
“In any case, it is his right because these are commercial houses and he has to make a profit,” he adds.
Mr Kabage says the new tax regulations by the Kenya Revenue Authority on rental income and introduction of levies by the county government are all indications that the rents and cost of owning a home will continue to rise.
County workers
Mr David Karanja, a director at Point A Commercial Agencies Limited, says high demand for housing has also contributed to the increase in rents. “Population growth since 2008 has put pressure on limited rental spaces, creating a need for rapid growth in real estate developments,” he says.
Under the new county government regime, more jobs have been created, further increasing demand for houses for the middle class.
Nakuru is, however, not only feeling the pinch of limited housing. The town centre has become busier as more people have bought cars, causing congestion on the roads. During the morning and evening rush hours, snaking traffic between Section 58 and the hospital footbridge – a 1.6km stretch – is a nightmare for commuters.
