Land prices in Ngong, Ongata Rongai, Tigoni and Kiambu shoot up - Report

Land prices in Nairobi’s satellite towns of Ngong, Ongata Rongai, Tigoni and Kiambu went up significantly in the last year, shrugging off fears that a two-year Covid-19 pandemic and last year’s General Election could push over investors.

Unlike last year, however, Juja, Kiserian and Syokimau have been shoved off the list of most coveted areas, even as Athi River, on speculations of extending the Standard Gauge Railway (SGR) to the Export Processing Zone (EPZ) in the area, saw it pop up on the list of towns land buyers are eyeing.

Despite the EPZ speculation and cash-in rush, Athi River just sparked a speculation and led to a 6.1 per cent increase in land prices over the quarter, even as Ngong town held its high of surge prices at 6.2 per cent compared to a year ago.

HassConsult, in a report released on Friday, however lists the previously coveted Kitisuru, Nyari, and diplomatic Gigiri zone as having significantly lost their shine in demand for land. This, even as the cost of an acre of land in Nairobi hit a high of Ksh.194 million, on average.

Areas with the highest prices of land per acre include Upper Hill (Ksh.486 million), Westlands (Ksh.450 million), Parklands (Ksh.405 million), Kilimani (Ksh.397 million), Riverside (Ksh.321 million), and Gigiri (Ksh.233 million).

For the satellite towns, Ruaka (Ksh.98 million) leads the fray, followed by Kiambu (Ksh.44 million), Mlolongo (Ksh.34 million), and Ngong (Ksh.30 million) closing in on Mlolongo. Athi River, however, staggered at Ksh.17 million despite an increase in land prices by 6.1 per cent.

Land prices in 10 out of 18 Nairobi suburbs are now above pre-pandemic levels, driven by sustained confidence and renewed development activity, the report further shows. Ruaka has been listed as the most expensive suburb with the average price of an acre now shy off Ksh.100 million.

“Land prices in Nairobi's satellite towns increased by 1.28 percent over the quarter, continuing their trend of higher appreciation rates compared to similar parcels in the city. This is attributed to the towns' affordability and improved infrastructure, making them attractive to investors,” said Sakina Hassanali, HassConsult’s Head of Development Consulting and Research.

“Year on year growth shows land prices in the satellite towns increased by 8.08 per cent compared to a 1.42 per cent annual increase in land prices in the city.”

Meanwhile, Nairobi’s Donholm, Kitisuru, Lang’ata, Loresho, Muthaiga, Nyari, Ridgeways, Runda, Spring Valley, and Westlands suburbs have increased their land values above their pre-pandemic rates. This is in line with the desire to expand the Gigiri area.

Middle income earners with disposable income for rent ranging between Ksh.25,000 and Ksh.50,000 are now residing in the satellite towns, even as the rental market declined by 0.5 per cent on lack of jobs among other post-pandemic issues.

The influx of middle-class populace in the satellite towns, particularly in search for apartments, has seen an increase in the overall returns, as indicated by rental yields and capital gains.

Most apartments located in satellite towns recorded average rental returns of 3.4 per cent over the quarter and 9.0 per cent annually, respectively.