Economy

Nairobi satellite estates gain from Covid-19 rent fallout

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Rental houses in Nairobii. FILE PHOTO | NMG

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Summary

  • Nairobi’s satellite estates registered a substantial increase in rent rates late last year on demand by households displaced from middle-class neighbourhoods due to the Covid-19 economic fallout.
  • A new survey shows that outpost estates in locations such as Ongata Rongai, Ngong and Thika recorded rent rises of 8.1, 4.8 and 3.4 per cent, respectively.
  • A report by property development firm, HassConsult shows that Ruaka and Syokimau also recorded slight rent rate rises of 1.2 percent and 0.2 percent respectively.

Nairobi’s satellite estates registered a substantial increase in rent rates late last year on demand by households displaced from middle-class neighbourhoods due to the Covid-19 economic fallout.

A new survey shows that outpost estates in locations such as Ongata Rongai, Ngong and Thika recorded rent rises of 8.1, 4.8 and 3.4 per cent, respectively.

A report by property development firm, HassConsult shows that Ruaka and Syokimau also recorded slight rent rate rises of 1.2 percent and 0.2 percent respectively.

On the other hand, rents in seven Nairobi suburbs including Kileleshwa, Kilimani, Langata, Lavington, Riverside, Upper Hill and Westlands recorded a drop.

Kileleshwa and Kilimani - accounting for 45 percent of advertised and sold property in Nairobi- led the pack with the highest rent falls by 8.4 percent and 9.4 percent respectively.

“People moved out of areas inside of town to satellites, affecting the rental prices and this also explains why Kileleshwa and Kilimani had a reduction in property prices,” said Ms Sakina Hassanali, head of development consulting and research at HassConsult.

Parklands was the only suburb that registered annual rent increase by 7.4 percent.

The economic fallout from the health crisis saw a majority of those who were paying high rents in plush apartments move to smaller, cheaper or unfinished homes in the outskirts.

The decline in prices in suburbs has also been tied to a shift by developers to put up smaller apartments with lower price tags, increasing supply hence the annual price corrections.