Nairobi suburb areas have experienced a dip in rental prices as well as house sale prices according to a report released by HassConsult on Tuesday, July 30.
The areas hit most by rent decreases are Upper Hill and Muthaiga suburbs with HassConsult citing tough economic times for the negative growth.
For 2024 Q2, Nairobi suburbs and satellite towns recorded only a 0.01 per cent increase in rent prices due to the declining number of people seeking to rent houses in suburban areas.
“Nairobi's satellite towns outperformed its suburbs with an average increase of 2.1 per cent increase compared to a 0.9 per cent decrease in the suburbs,” the report read in part.
“This rise in satellite towns can be attributed to accelerated urbanisation, which has bolstered demand and pushed up asking prices.”
On why suburban areas were recording decreasing rent rates, HassConsult revealed it was due to the growing cost of credit.
Property owners are cautious about raising rents to retain tenants amid higher taxes and inflation, which has constrained disposable income according to the report.
Apartments in Upper Hill recorded the lowest quarterly increase in rental prices registering a -4.3 per cent over the last quarter.
With a -4.3 per cent over the last year, houses in Muthaiga recorded the lowest annual increase in rental prices.
Upper Hill not only saw a dip in rental growth but also a decline in house sale prices.
Apartments in Upper Hill recorded a -3.9 per cent decrease in sale prices over the last quarter and a -8.3 per cent decline in annual sales prices.
“While higher interest rates on mortgages do not have a significant impact on market-wide property price movements due to the low mortgage participation in the country, the rise in rates has the effect of reducing market liquidity, in general, resulting in a dampening of demand,” stated Sakina Hassanali, Head of Development, Consulting, and Research at Hass Consult.
