Kenya Urban Roads Authority official John Mwatu (left) and James Macharia, the Cabinet Secretary for Transport, Infrastructure, Housing and Urban Development, during a tour of the link roads under construction in Ruaka, Kiambu and Westlands in Nairobi last October. PHOTO | SALATON NJAU | NMG
Kiambu’s Ruaka area recorded the highest land price inflation that pushed the cost of one acre to Sh83.1 million, up from Sh43.9 million five years ago.
Kahawa Sukari in Kiambu area also recorded robust price growth over the period.
Land prices rose at the fastest rates in Kiambu over the past five years, making the county, west side of Nairobi, the best place to own property in Kenya.
The cost of land in the lakeside city of Kisumu also gathered pace in the same period to record the biggest jump in the past one year, according to newly released industry data.
Housing and property management firm HassConsult’s County Land Price Report shows that Nakuru was third in terms of land price escalation, indicating the intensity of demand for property in the cities.
HassConsult says in the report that land prices rose at an average rate of 14.72 per cent in Kiambu over the past five years followed by Kisumu’s 12.74 per cent and Nakuru’s 12.70 per cent.
Kiambu’s Ruaka area recorded the highest land price inflation that pushed the cost of one acre to Sh83.1 million, up from Sh43.9 million five years ago. Kahawa Sukari in Kiambu area also recorded robust price growth over the period.
“Kiambu’s exceptionally strong land price growth continued during the election year — driven by developers’ search for affordable land around Nairobi, which is just 16 kilometres away,” HassConsult said.
The cost of land in other counties around the Nairobi Metropolitan — Machakos and Kajiado — have grown almost as fast.
HassConsult says land prices rose by a lower national margin of 7.37 per cent last year compared to 12.07 per cent the previous year — a clear signal that the high-stakes politicking that came with the General Election negatively affected the real estate sector.
Kisumu and Nakuru stood out as counties where land prices shrugged off last year’s prolonged electioneering to maintain a steady rise.
Kisumu registered a 12.74 per cent year-on-year growth rate, with an acre selling at Sh6.97 million, up from Sh3.8 million in 2012.
“Kisumu has experienced a real estate boom as developers cash in on rising demand for housing, aided by reasonable land prices. Infrastructure developments in hospitality, real estate and shopping malls as well as devolution have helped attract investors from other towns,” said Sakina Hassanali, the firm’s head of development consulting.
Nakuru, described as one Kenya’s most cosmopolitan towns, enjoyed a 12.7 per cent year-on-year growth pushing the the average price of an acre of land to Sh4.58 million in 2017 against Sh4.5 million in 2012.
Ms Hassanali, who spoke in Nairobi during the opening of the two-day East Africa Property Investment (EAPI) summit, said Nakuru’s rich agricultural lands had attracted heavy investments that were the main drivers of price inflation.
Nakuru’s Ngata witnessed the sharpest rise in land prices that left an acre at Sh6.4 million, Sh4.9 million in Naivasha and Sh12.4 million in central Nakuru town.
Nairobi, however, remains by far the city with the highest land prices, averaging Sh189 million per acre, while Mombasa is second with Sh49.7 million. Land prices in the two leading cities grew at an annual rate of 4.23 per cent and 9.87 per cent respectively.
An acre in Kilifi closed 2017 at Sh15.6 million, having risen 6.92 per cent. Machakos, which registered an 8.44 per cent annual growth, closed the year with an acre going for Sh13.2 million.
The survey also found that interest rates capping adversely affected the uptake of loans to finance acquisition of land countrywide.
The report says there was heavy infrastructure development in 10 counties and 75 towns that also attracted the highest volumes of real estate investments and industrial as well as commercial development.
Participants at the EAPI event that attracted property developers, financiers and other real estate professionals emphasised the need to improve the investment climate for small and medium enterprises in order to spur job creation.
Strathmore Business School’s Construction Project Management leader Raul Figueroa said Kenya’s Big 4 pillar on housing could best be achieved if more cheap and affordable long-term mortgage products were made available to low-income earners.
