Muthaiga and Donholm estates have recorded the biggest jump in land prices in Nairobi over the past six years, revealing buyer preference for exclusivity and ease of access.
Real estate data collated by realtor HassConsult shows that the price of an acre of land in Muthaiga has gone up by 71 percent since 2015 to Sh185.2 million currently, while the cost of the same size of land in Donholm has risen by 48 per cent to Sh70.8 million.
Muthaiga’s biggest draw is its continued exclusivity, having so far escaped encroachment by apartment builders. The estate is home to prominent Kenyans and a large number of foreign mission residences, including those of the US, the UK and Germany.
Land scarcity has also helped drive up prices in Muthaiga, which is one of the oldest high-end residential estates in the city.
The gain in land value in Donholm has on the other hand been helped by road development that has eased access to the area and a mushrooming of malls in the vicinity that has brought previously unavailable amenities closer to residents.
The recent upgrade of the Outer Ring Road to a dual carriageway has eased access to Nairobi’s Eastlands estates, among them Donholm.
Estates with significant land price increases since 2015 include Langata, where the cost of an acre has appreciated by 30 per cent to Sh63.5 million, Spring Valley and Karen, which have each recorded an increase of 23 per cent to Sh174.5 million and Sh62.3 million respectively.
Kitisuru has seen a 20 per cent increase in the price of an acre to Sh89.8 million.
Road upgrades, including the Southern and Northern bypasses, have been key in driving up land and property prices in these neighbourhoods, according to HassConsult.
In the past one year, when a majority of the suburbs have seen their land prices go down due to the negative effects of the Covid pandemic, Muthaiga and Donholm bucked the trend to register price increases of 3.9 per cent and 2.2 per cent respectively.
Parklands led with a price fall of 7.3 per cent, followed by Riverside and Upper Hill at 7.2 per cent and 5.4 per cent respectively.
Overall, land value in Nairobi’s suburbs fell by 2.56 per cent in 2020 compared to a 1.69 per cent rise in 2019.
Land prices in the city have generally been subdued since 2019 due to tighter conditions for accessing credit, with the Covid-19 pandemic also hurting demand as buying power diminished due to job losses and pay cuts.
There was more elasticity in the price of land in Nairobi’s satellite towns, however. Last year, the average price of an acre in the surrounding towns which are in Kiambu, Kajiado and Machakos counties fell by1.11 per cent, compared to an increase of 6.9 per cent in 2019.
Kiambu was particularly hard hit, with the Hass land index showing that Kiambu Town, Ruiru and Limuru had the biggest annual drops in asking prices of 11.4 per cent, six per cent and three per cent respectively. Ruaka and Juja recorded drops of 1.5 per cent and 0.3 per cent in that order. Land prices in these areas had been driven up in recent years by speculative buying and infrastructure development.
Ngong was the best performing town, with an increase of 9.9 per cent, followed by Ongata Rongai at 8.2 per cent, Mlolongo 5.4 per cent, Kitengela 2.8 per cent and Athi River 2.6 per cent.
In terms of the highest cost per acre, Upperhill continues to lead the way in Nairobi at Sh509.9 million.
The area has in recent years emerged as a commercial hub for the city, taking in many businesses that have decamped from the central business district. It is followed by Westlands ( Sh420.2 million), Kilimani (Sh413.8 million), Parklands (Sh378.5 million), Riverside (Sh343.9 million) and Kileleshwa (Sh301.4 million).