NAIROBI, Kenya, Jan 30 – Access to the Thika Super highway have pushed land prices in Juja to an all time high compared to other satellite towns around Nairobi in 2016.
Hass Consult’s quarter four index reports that Juja increased its asking price by 6.32 percent over the quarter and by 50.88 percent over the last year.
Head of Research and Marketing Sakina Hassanali says the area has benefitted from the comparative reduced commute time between the area and the city.
“Juja is doing extremely well because it is served by an eight-lane road which improves access to the area. Distance (between the towns and the city) is no longer about Kilometers but is now about minutes taken,” Hassanali said.
According to the index, the average price of an acre in Juja is Sh10.6 million, a 12 fold growth since 2007.
On the other hand, Mlolongo was the worst performer over the two periods with its asking price dropping by 1.47 and 15.83 respectively.
Hassanali credited Mlolongo’s heavy congestion along Mombasa Road which has seen little expansion compared to other highways.
“Despite the development the area continues to witness, the road has not changed and its still congested meaning it takes even more time to get there, hence the drop in prices,” she explained.
Athi River was also classified in the same cluster as Mlolongo owing to too much time spent on the road.
The index also lists Gigiri as the best performing suburb in Q4 and Donholm the best annual performer among Nairobi’s suburbs.
The findings came as the company revealed an overall drop of 0.14 percent in asking prices in the last quarter.
“The drop in asking prices is a result of sluggish microeconomics environment that has witnessed corporate layups and slow uptake of credit despite the capping of interest rates.”
Capping of interests was expected to catalyse lending but as Hassanali explains, this is yet to happen.
“Capping of interest rates has failed to live up to the expectation of increased uptake of lending. This is especially so because commercial banks have become conservative in lending making access to credit for property acquisition low.”
There, however, has been a strong demand for exclusive suburbs that are less built up over suburbs that have high-density developments.
For instance, Muthaiga was the best performing suburb in 2016 with average house prices increasing by 15.8 percent respectively. Kitisuru and Lang’ata followed closely.
Despite a modest 0.1 per cent increase in asking property prices in Nairobi’s suburbs, there were pockets of stellar performance in the fourth quarter of 2016 with Muthaiga leading the pack in suburbs that recorded double digit increases in asking property prices.
According to Hassanali, being exclusively high end, such suburbs tend to be less affected in a sluggish economy.
At the same time, detached houses were noted to have driven prices in low density suburbs up as they recorded the best performance with house asking prices for these property types increasing by 11.33 percent in 2016. This is despite a slight dip of 0.21 percent.
In the suburbs, Kilimani recorded both the lowest quarterly and annual increase in sales prices.