HassConsult has released the Hass Land Price Indices for the fourth quarter of 2024, revealing a slowdown in the growth of land prices in Nairobi’s satellite towns. The data indicates that tough economic conditions have dampened demand, leading to the slowest rate of price increases since June 2023.
Slower Growth in Satellite Towns
The average cost of an acre of land in satellite towns rose by 1.9 percent during the period, a decline from the 3.02 percent growth recorded in the previous quarter. This marks the slowest rate of expansion since the 1.22 percent observed six quarters ago.
Out of the 14 towns monitored, nine recorded a deceleration in price growth. Notable examples include:
- Thika: Growth dropped from 6.3 percent in Q3 to 0.9 percent in Q4.
- Mlolongo: Growth fell from 6.6 percent to 1.1 percent.
- Kiambu and Ngong recorded negative growth, with declines of -0.3 percent and -0.2 percent, respectively.
Other towns experiencing significant slowdowns include:
- Ruiru: Declined from 4.9 percent to 3.2 percent.
- Syokimau: Reduced from 4.8 percent to 3.4 percent.
- Kiserian: Fell sharply from 4.7 percent to 2.0 percent.
Challenges in the Land Market
In previous quarters, satellite towns had benefited from strong demand by private and commercial property developers. However, economic hardships, such as job losses and high interest rates, have now constrained potential buyers.
Ms. Sakina Hassanali, Head of Development Consulting and Research at HassConsult, explained:
“Periods of economic uncertainty and slowing GDP growth can lead to some developers putting off decisions to acquire land, thus reducing demand which drives prices higher.”
She also noted that the infrastructure-driven price surge in areas like Thika, Kiserian, Mlolongo, and Syokimau appears to be losing momentum after substantial increases in earlier quarters.
Steady Growth in Suburbs
In contrast to the slowdown in satellite towns, land prices in Nairobi’s suburbs showed steady growth, increasing by 1.7 percent in Q4 compared to 1.6 percent in Q3. The leading areas included:
- Parklands: 3.4 percent growth.
- Upperhill: 3.3 percent growth.
- Spring Valley: 3.1 percent growth.
- Kileleshwa: 3.0 percent growth.