HassConsult recently released the Hass Property price indices for the second quarter of 2023, revealing a stagnation in property prices with a 0.5 percent drop in the quarter and a cumulative 1.8 percent drop over the year.
This decline in property prices can be attributed to economic uncertainty arising from increasing costs, the possibility of higher taxation, and a rise in financing expenses. As a result, consumer confidence has decreased, leading to a decrease in speculative demand for real estate.
On the rental side, average property rental prices experienced a marginal increase of 0.1% in the quarter. This growth was primarily driven by a renewed demand for rental apartments, which continued to grow due to their increased affordability, rising by 1.8 percent in the quarter. However, the demand for houses decreased by 0.5 percent during the same period.
Notwithstanding the overall subdued performance in both sale and rental pricing, certain areas showed pockets of growth. Particularly, Ngong, Langata, and Ongata Rongai demonstrated robust returns across the board.
In the case of Langata and Ngong, sale prices for houses increased by 12.8 percent and 18 percent respectively in the year leading up to June 2023. Meanwhile, apartment prices in these areas also experienced significant growth, rising by 15.5 percent and 6.8 percent respectively in the same period.
Ms. Sakina Hassanali, the Head of Development, Consulting, and Research at Hass Consult, attributed this growth to the expansion of Ngong road, which transformed Karen into a super suburb with spillover pricing effects on surrounding areas. Ngong and Langata’s expanding infrastructure, along with their proximity to Karen, have contributed to their emergence as residential hubs.
These developments have led to increased demand for middle-market housing in surrounding suburbs, resulting in strong rental growth rates in Ngong Town and Ongata Rongai. Ngong Town witnessed a 17.6 percent increase in house rental prices in the last year, while Ongata Rongai experienced a 22 percent increase in apartment rental prices during the same period.
