A report from the Hass Consult released on Saturday, April 29, detailed reasons why apartment rent prices increased in the first quarter of 2023.
From the report, nine satellite towns led by Ongata Rongai recorded increased apartment rental prices in the first quarter.
According to the report, the prices rose due to the underperformance of other asset classes, such as bonds, equities, and fixed deposits, making these apartments an attractive investment option.
"Nearly all towns posted positive growth on apartment rental pricing highlighting the increasing occupancy rate of apartments targeted at renters with a monthly budget between Ksh25,500 and Ksh50,000," read the report in parts.
Other towns listed were, Kiambu, Mlolongo, Ruaka, Syokimau, Thika, Ngong, Kitengela, and Athi River.
The towns recorded an increase ranging between 0.5 per cent to 5.9 per cent compared to quarter four of 2022.
"Demand for affordable rental properties, particularly apartments in satellite towns, has impacted the overall returns, as indicated by rental yields and capital gains," stated Sakina Hassanali, Head of Development Consulting and Research at HassConsult.
Furthermore, the report detailed that the rental market experienced a decline of 0.5 per cent on average over the last quarter and a decrease of 1.2 per cent over the past year.
According to the report, in the past two decades, more Kenyans have moved from detached and semi-detached apartments to apartments.
In 2001, apartments took up 45.3 per cent of the market, but as of December 2022, the rate stood at 59.8 per cent, while semi-detached and detached houses are at 30.3 per cent and 9.9 per cent, respectively.
Meanwhile, Ngong, Ruiru, and Athi River recorded the highest annual change of 17.4 per cent, 14.3 per cent, and 9.1 per cent, respectively, in rental prices.
This was due to the improved infrastructure and accessibility to social services such as schools, hospitals, and shopping outlets.
