A report by real estate company, HassConsult, has detailed a decline in demand for housing and land in three Nairobi posh estates.
In the Q3 report that was released in November, Kileleshwa, Donholm and Riverside were listed as the estates becoming less attractive to potential homeowners.
Kileleshwa was the most affected, with the suburb registering an oversupply of land and houses. This led to a drop in land prices by 0.6 per cent between July and September. Since the beginning of the year, land prices in Kileleshewa have dropped by 2.8 per cent.
Regarding house prices in Kileleshwa, a 2.5 per cent drop was registered between January - September 2023.
Similarly, in Riverside, land prices dropped by 1.9 per cent since the beginning of the year.
Donholm estate, on the other hand, registered one of the biggest drops in rent between July - September, at 6.7 per cent.
Why Are Kenyans Avoiding the Estates
Emergence of Highrise Buildings
Kileleshwa has, over the years, been predominantly known as a suburb for the rich, who mostly prefer stand-alone houses for privacy.
However, with the emergence of flats and apartments being undertaken by private developers, the rich prefer to invest in other leafy suburbs.
Notably, the residents, including the area Member of the County Assembly, Robert Alai, have led protests against the mushrooming of the high-rise buildings.
"We want to stop the development until public infrastructure is improved, the developers listen to the residents and take the considerations of the public into account.
"There is no public participation because approvals of the environmental impact assessment are being issued without any regard for public participation," Alai told Kenyans.co.ke during an interview on October 26.
Cost of Living
On the other hand, the cost of living has also affected the super-rich, who are increasingly facing auctions, given the current state of the economy.
Despite land prices and rent registering a drop in these estates, the prices still remain relatively high for a majority of Kenyans.
For instance, in Kileleshwa, Riverside and Donholm, an acre piece of land is sold at Ksh292 million, Ksh320 million and Ksh77 million, respectively.
"Higher interest rates impacting market liquidity negatively affected demand for own-to-occupy real estate during the quarter, largely constituted of detached and semi-detached homes.
'Banks are also exercising stringent lending, mitigating the risk of loan defaults in a tightening economy that is characterised by inflation and higher taxation," read the HassConsult report in part.
Emergence of Satellite Towns
As the Kenyans lose interest in the three estates, Nairobi satellite towns are attracting more Kenyans seeking to buy land, build homes and rent houses.
The satellite towns offer affordable rates as compared to the leafy suburbs. Land prices in satellite towns range between Ksh10 million to Ksh100 million.
According to the HassConsult Report, the satellite towns gaining traction include Thika, Syokimau, Ngong, Limuru and Juja.
“Improved road infrastructure has maintained price growth in Ngong, Mlolongo, Athi River Thika and Syokimau by attracting both commercial and residential developers to the satellite towns with the benefit of easing the strain of congestion in the city while providing more affordable housing solutions on the city fringe,” the report highlighted.
