Nairobi residents still reliant on landlords as home ownership well dries up
A tough economy has left Nairobi residents reliant on rental properties with the availability to funds to purchase homes drying up in the last year.
According to the Nairobi Metropolitan 2020 Residential Report by Cytonn Real Estate, home ownership continues to remain elusive to sustain the demand for rental residential units.
Rental yields have in turn remained resilient to the tough economic environment to stand at an average five percent at the end of 12 months to June in comparison to 4.7 percent last year.
Meanwhile, the price of residential properties has declined by 0.1 percent in the period from an appreciation of 0.3 percent in 2019.
Frozen home ownership is despite the offer of price discounts by home sellers with the average asking price per square meter (SQM) declining to Ksh.113,972 from Ksh.119,330 last year.
The market uptake of residential units has meanwhile fallen to 18.3 percent from 20.9 percent to mirror the weakened demand.
Tenants continue to favor living in apartments with the units registering average total returns of 5.3 percent in the year in comparison to detached units which booked a combined return of 4.6 percent.
Detached units in Rosslyn and Kitisuru booked the highest change in returns year over year in the high end segment.
Ridgeways, Langata and Lavington marked the largest gains in the upper-mid end while Juja, Syokimau and Kitengela marked the highest returns in the lower mid-end front.
Westlands and Parklands marked the highest return for apartment landlords ahead of Dagoretti, South C and Donholm in the lower mid-end and Thindigua, Athi River and Ruiru in satellite towns.
The reports denotes Ruiru, Runda, South C and Karen as harboring investment opportunities for detached units based on factors such as annual uptake, state of infrastructure and the availability of development land.
Ruaka, Westlands, Thindigua, Langata and Ngong Road are meanwhile tagged as the greatest future earning notes for apartments.