House prices in the Nairobi Metropolitan Area declined by 0.5% in the second quarter of the year, compared to a 3.3% increase in Q2’2022, according to Hass Consult House Price Index Q2’2023 Report.
This decline was mainly due to corrections of 0.6% and 1.2% in detached and semi-detached house prices, respectively.
Sakina Hassanali, Head of Development Consulting & Research at Hass Consult, a consulting and Real Estate development firm based in Kenya, attributed this decline to economic uncertainty.
“Rising costs, prospects of higher taxation, and a higher cost of financing have resulted in reduced consumer confidence, stalling speculative demand on real estate,” she said.
However, the performance was supported by a 1.3% increase in the selling prices of apartments.
On a year-over-year basis, the average selling prices for properties dropped by 1.8%, compared to the 10.5% increase recorded in Q2’2022.
The report also showed that overall asking rents of housing units in the NMA during Q2’2023 slightly increased by 0.1% quarter-over-quarter, compared to the 1.1% growth recorded in Q2’2022.
This is attributed to slower growth in the rental market and landlords offering rent incentives to attract customers.
Lang’ata was the best-performing node for detached and semi-detached houses in the Nairobi Suburbs during this period, recording a year-over-year sale price appreciation of 12.8%.
This was fueled by its affordability compared to neighbouring affluent nodes such as Karen.
“The expansion of Ngong Road has opened Karen up to super suburb status, whose growth as a commercial node for the surrounding towns is having spillover pricing effects,” said Ms Sakina.