Economy

Wealthiest, cheapest estates in corona era

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Apartments in Makongeni, Thika. PHOTO | KANYIRI WAHITO | NMG

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Summary

  • Nairobi’s Gigiri suburb is home to the most expensive houses in the capital while Kiserian is the most affordable neighbourhood with house prices in estates associated with the Kenya’s super-rich defying Covid-19 economic fallout.
  • On average, homes cost about Sh120.7 million in Gigiri, which neighbours the United Nations complex, up from Sh117.3 million in March last year when Kenya reported the first Covid-19 case.

Nairobi’s Gigiri suburb is home to the most expensive houses in the capital while Kiserian is the most affordable neighbourhood with house prices in estates associated with the Kenya’s super-rich defying Covid-19 economic fallout.

On average, homes cost about Sh120.7 million in Gigiri, which neighbours the United Nations complex, up from Sh117.3 million in March last year when Kenya reported the first Covid-19 case.

HassConsult, a real estate consultancy, lists average house prices in Nyari Estate at Sh103.6 million, making the neighbourhood the second most expensive in the city, reflecting a 1.8 percent growth from March last year.

The price guide is contained in the quarterly property price index, which shows that the home prices, on average, recorded a marginal drop of 0.07 percent compared to a cut of 1.2 percent in the quarter ended December.

The drop was linked to property price falls in satellite towns of Kiambu, Kajiado and Machakos, which have been a target of Kenya’s growing middle class, including traders and workers.

This category of real estate investors bore the brunt of Covid-19 economic fallout, which has led to job losses, pay cuts, closure of firms and cuts on bank loans and mortgages.

The high-end suburbs, however, generally bucked the trend to record an increase in prices ranging from 1.1 percent in Westlands to 6.3 percent in Runda.

On average, home prices in Westlands stood at Sh54.9 million in the quarter ended March and Sh95.9 million in Runda.

Other estates in the city with pricey houses include Karen at an average Sh89.6 million, up from 2.4 percent in March last year, Kitisuru at Sh86.4 million, Muthaiga (Sh84.8 million) and Spring Valley at Sh63.3 million.

The prices in Kitisuru, Muthaiga and Spring Valley rose 3.3 percent, 5.6 percent and 1.3 percent respectively

Other than Karen, most of these neighbourhoods lie squarely in what is known as the UN diplomatic blue zone, which is recommended for expatriates due to higher security.

Gigiri hosts the United Nations Office at Nairobi (UNON) and the embassies of several Western economies such as the US, Canada, Italy, Sweden, Poland, Belgium and Norway.

It is also home to many embassies for African countries besides residences for various ambassadors and high commissioners. A majority of Kenya billionaires and top politicians reside in these estates, making them a magnet for the rich.

Housing has been one of Kenya’s fastest growing sectors over the past decade, fuelled by a growing middle class, with returns from real estate outpacing equities and government securities.

This fuelled a boom in land prices that had increased nearly four-fold in Nairobi and surrounding satellite towns like Kiambu, Ongata Rongai and Kitengela before the slowdown in real estate and the emergence of Covid-19 pandemic.

Satellite towns in Nairobi on the other hand command much lower house selling prices and witnessed price drops of between 0.5 percent and seven percent, pulling down the overall price index.

The lowest average selling price was found in Kiserian, Rongai and Juja, where houses were selling at Sh8.9 million, Sh10.7 million and Sh11 million respectively as at March.

These satellite areas, which have proven popular with Nairobi’s working class seeking affordable accommodation, were worst hit by a price decline in the past one year. Juja led with a decline of seven percent in asking price during the year, followed by Rongai at 6.9 percent while the cost of Athi River fell by 6.5 percent.

Limuru and Kitengela also saw significant price declines of 4.1 percent and 3.3 percent respectively, pushing the asking prices of houses in the areas down to Sh27 million and Sh11 million. Some of the newer satellite towns have seen property values hurt by lack of access to basic services such as sewerage and reliable water supply as well as bad roads and heavy traffic. But land prices rose fastest in the satellite towns.

HassConsult data shows that prices of land in areas such as AthiRiver, Juja, Mlolongo, Limuru and Ngong increased by between 0.8 percent and 6.07 percent.