HassConsult’s latest Hass Property Price Index reveals a modest 1 percent increase in property sales prices across Nairobi for the second quarter of 2024. This growth, although slower than the 2.7 percent rise recorded in the previous quarter, signifies the eighth consecutive period of price increases, underscoring a trend of stability in the city’s property market.
“While higher interest rates on mortgages don’t significantly influence overall property price movements due to low mortgage participation in the country, they do reduce market liquidity, leading to a dampened demand,” said Ms. Sakina Hassanali, Head of Development, Consulting, and Research at HassConsult. “Despite these challenges, the property market has demonstrated resilience with continued price stability in most areas.”
The report highlights that despite prevailing high interest rates and a stronger shilling reducing the advantages for foreign buyers, Nairobi’s property sales prices have continued to climb, albeit at a diminished rate.
In a detailed breakdown, Nairobi’s satellite towns have outperformed the city’s suburbs, recording an average price increase of 2.1 percent compared to a 0.9 percent decrease in suburban areas. This growth in satellite towns is attributed to accelerated urbanization, which has driven up demand and subsequently pushed up asking prices.
Rental prices have seen a slight uptick of 0.01 percent this quarter. Property owners remain cautious about increasing rents to retain tenants amid higher taxes and inflation, which have constrained disposable income. Rental yields reveal a disparity between different areas: in Nairobi’s suburbs, the average yield rose to 7 percent by the end of June from 6.9 percent in March. Conversely, rental yields in satellite towns experienced a slight decline from 4.9 percent in March to 4.8 percent in June, reflecting the varied market conditions across these regions.
