Nairobi
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Property prices in Nairobi and its surrounding areas experienced a notable increase of 5.2 percent in 2024, a significant rise from the 2.5 percent growth recorded the previous year.
This acceleration in market activity has been primarily attributed to a growing demand for standalone homes, which have become increasingly scarce compared to apartments. A recent survey by the real estate firm HassConsult identifies Juja, Ridgeways, and Loresho as leading areas in house price growth, with increases of 12.9 percent, 12.5 percent, and 11.6 percent, respectively.
The surge in prices for detached homes, which climbed by 7.5 percent over the past year, has distinctly outperformed both apartments and semi-detached houses, which saw modest increases of 1.6 percent and 0.8 percent. According to HassConsult, the limited supply of detached homes has significantly influenced their strong price performance. As of December 2024, detached houses represented only 7.2 percent of the property market, a sharp decline from 32.7 percent a decade ago.
In contrast, semi-detached units and apartments made up 22.9 percent and 69.9 percent of the market, respectively. Sakina Hassanali, head of development consulting and research at HassConsult, emphasizes that the scarcity of detached units has been a driving factor behind their price surge, while the rising availability of multi-dwelling units, notably apartments, has tempered their growth.
As of December, the average price of a property in Nairobi stood at Sh36.7 million. Notably, properties with four to six bedrooms averaged Sh40.6 million, while one to three-bedroom homes averaged Sh13 million.
In the rental market, property prices in Nairobi contracted slightly by -0.02 percent in 2024. This downturn underscores landlords’ challenges in increasing rents amid difficult economic conditions, following a 2.5 percent rise the previous year.
The subdued rental yields have diminished overall returns on property investments, making them less appealing compared to alternative asset classes such as government securities and equities. HassConsult reports 2024 property returns, including capital gains and rental yields, trailing behind other investment opportunities. Rental yields were recorded at 7.2 percent in suburbs and 5 percent in satellite towns, while Treasury bills offered interest rates ranging from 9.5 to 11 percent.
The survey also highlights that the average rental price for properties across 14 suburbs and 10 satellite towns was Sh167,704. Within this context, four to six-bedroom houses had an average asking price of Sh237,107, while one to three-bedroom properties were listed at an average of Sh92,377. Despite the upward trend in standalone unit prices, overall property investment returns remain less competitive compared to alternative financial instruments.