Houses in Nairobi’s uptown are among the areas that continue to command the highest prices despite house prices dropping by 1.1 per cent in the third quarter of 2024 compared to the previous quarter and falling 14.28 per cent year-on-year.
According to the latest Kenya Bankers Association (KBA) Housing Price Index, townhouses and maisonettes remain the most expensive, averaging Ksh38.63 million and Ksh26.08 million, respectively.
However, areas like Kileleshwa, Kilimani, Lavington, Westlands, Spring Valley, and Riverside recorded the highest prices, with townhouses averaging Ksh59 million. The report found that the high-market segment accounted jumped from 33.7 per cent in the second quarter of 2024 to 37.2 per cent of all transactions in the third quarter of 2024.
Other areas that fall in this category are Runda, Karen, Garden Estate, Parklands, Ridgeways, Muthaiga, Loresho, Kitisuru, Adams Arcade, Nyali, Mountain View, and Nyari.
According to the survey, houses in Athi River, Mlolongo, Ngong, Ruaka, Syokimau, Embakasi, Kahawa Wendani, Thika, Kitengela, Ruiru, Thika Road (Kasarani, Roysambu, Ruaraka) saw housing activity decline to account for 45.3 per cent of transactions during the third quarter of 2024 from 48.1 per cent in the previous quarter.
“The downward shift points to the correction in housing prices, which is occasioned by macroeconomic adjustments impacting the real estate and construction sectors,” noted the report.
The report indicated that this downward trend is largely attributed to a shift in buyer preferences towards more affordable housing options.
However the report noted that areas such as Mlolongo, part of the low-market segment, experienced a 34.3 per cent increase in average house prices, rising to Ksh10.97 million from Ksh8.17 million in 2021. This surge is indicative of the growing demand for affordable housing in Nairobi's outskirts, as middle-class buyers seek cost-effective alternatives.
In terms of housing types, apartments continued to dominate the market despite a 14 per cent quarter-on-quarter decline in demand. They accounted for 40.19 per cent of completed transactions in the current quarter, down from 54.35 per cent in the third quarter.
Bungalows maintained a steady share at 29.91 per cent, while maisonettes saw a notable increase in demand, rising to 29.91 per cent from 15.22 per cent in the previous quarter.
The average price of a maisonette stood at Ksh20.17 million, followed by apartments at Ksh17.51 million, and bungalows at Ksh10.78 million.
These figures reflect the overall market trend, with buyers gravitating towards more affordable housing options, leading to price adjustments across various segments.
The construction sector mirrored these market dynamics, exhibiting fluctuating activity throughout the year. The first quarter saw a slight increase of 3.06 per cent, followed by a decrease of 2.55 per cent in the second quarter, and a subsequent rise of 3.8 per cent in the third quarter. These fluctuations have influenced housing supply, contributing to the observed price changes.
