Consumers residing in Nairobi and surrounding areas saw a slight uptick in rent during the initial quarter of this year, attributed to elevated inflation as per Hass Consult’s findings.
According to the Hass Property Index, rental rates increased by 0.4 percent in Q1 2024, following a deceleration from 2.5 percent in Q4 2023.
Detached houses witnessed a 0.1 percent rise in asking rent, apartments surged by 1.4 percent, while semi-detached houses experienced a slight decrease of 0.3 percent.
Although most satellite towns observed a marginal rise in rent, only Ruaka and Kiambu apartments saw a reduction of 0.4 percent each between Q4 2023 and Q1 2024.
Towns such as Ruiru, Tigoni, Limuru, and Kiserian witnessed marginal rent increases of 0.1 percent, 0.2 percent, 0.3 percent, and 0.8 percent, respectively.
Notably higher rent hikes were observed in Thika, Mlolongo, and Kitengela, with apartment prices rising by 6.3 percent, 4.1 percent, and 7 percent, respectively.
Hass Consult reported that among Nairobi’s 18 suburbs and 14 satellite towns, only Muthaiga and Ridgeways saw a decrease in rental prices during the quarter. However, all others managed to increase their asking rents, though to a lesser extent compared to the previous quarter.
“While inflation has decreased since the beginning of the year, the economy remains subdued, impacting rental yields which rose to 6.9 percent in March from 6.7 percent in December 2023,” stated Hassanali.
When selecting a rental property, factors such as accessibility and convenience were considered by tenants. This led to Westlands, with its good road network, emerging as the most attractive business district in the city, experiencing a 5.8 percent increase in asking rent, followed by Loresho at 3.2 percent and Nyari Estate at 3 percent.
Regarding the property sale index, the firm reported a 2.7 percent increase in prices for Q1 2024, down from 4.1 percent in Q4 2023 due to high interest rates.
“The rise in asking prices slowed in the first quarter due to tightened credit conditions following the increase in the CBK’s base lending rate to 13 percent, which drained liquidity from the market,” Hassanali added.
Ridgeways and Loresho led the suburban areas in quarterly price growth at 2.9 percent and 2.7 percent, respectively. In satellite towns, top performers included Juja at 3.4 percent, Ngong at 2.7 percent, and Limuru at 2.2 percent.
