Over the years, the price of land in Nairobi and its environs has been skyrocketing, with some areas considered as prime hitting an all time high of up to Ksh1 billion per acre. And with the growing population and demand for land to set up residential and commercial buildings, this trend is expected to continue for a couple of years.
The latest report released on Monday, January 31, by realtor HassConsult, has revealed fourteen most profitable areas investors can purchase land and be assured of high returns within a short period of time.
According to the report, on average a house now costs 3.1 per cent more in the city, from a drop of 0.20 per cent last year and 3.5 per cent in 2019.
The report details 14 areas where land prices more than doubled in the year ending 2021. Hass Land Index revealed that if you had invested Ksh1 million in the 14 satellite towns in 2007, the land would be worth Ksh9.16 million today, Ksh6.32 million if invested in 18 suburbs within Nairobi, and Ksh2.46 million if invested in property.
The fourteen satellite towns include Athi River, Juja, Kiambu, Kiserian, Kitengela, Limuru, Mlolongo, Ngong, Ongata Rongai, Ruaka, Ruiru, Syokimau, Thika, and Tigoni. The report indicates that the satellite towns have had land values increase 9.61 times since December 2007, compared to Nairobi suburbs where land values have increased by only 6.32 fold despite being the priciest.
Ruaka recorded the highest land value where an acre costs an average of Ksh89.1 million followed by Kiambu town at Ksh39.3 million, Mlolongo Ksh31.4 million, and Ruiru Ksh26.9 million.
Areas within Nairobi also had the highest increase in price. The 18 suburbs including Donholm, Gigiri, Karen, Kileleshwa, Kilimani, Kitisuru, Langata, Lavington, Loresho, Muthaiga, Nyari, Parklands, Ridgeways, Riverside, Runda, Spring Valley, Upperhill, and Westlands had an acre of land hit Ksh191.1 million in December 2021 from the initial price of Ksh30.3 million in December 2007.
An acre in Upperhill is the most expensive in the city at Ksh509.7 million, followed by Westlands and Kilimani at Ksh423.4 million and Ksh413.1 million respectively.
In other suburb areas, Spring Valley had the highest gain of 10 per cent with an acre selling at Ksh191.9 million from Ksh174.5 million in 2020.
Langata also recorded an increase in prices gaining 6.1 per cent from ksh63.7 million an acre in 2020 to Ksh67.6 million last year, while Nyari’s price per acre rose by 5.9 percent to Ksh111.8 million.
However, some suburbs such as Riverside, Loresho, and Donholm led in price fall, shedding Ksh14.4 million, Ksh3.4 million, and Ksh1 million to ksh329.5 million, Ksh84.5 million, and Ksh69.8 million per acre respectively.
HassConsult Head of Development Consulting and Research, Sakina Hassanali, explained that the Kilimani suburb continues to cool as investors remain doubtful about the area due to uncertainty on whether the present infrastructure will support the new wave of developments the area is now attracting, thus weakening its appeal.
“A few years ago, it was the exception for a residential building to have a lift but today it is the norm. The new developments are high density units including studio apartments which is a shift from the ample apartments and detached houses that the characterized the suburb a decade ago and it is not clear if the present infrastructure will adequately cater for all stock coming through,” Sakina stated.