NAIROBI, Kenya, Oct 30 – There is high demand for low middle-income housing in far-flung Nairobi’s metropolis.
Hass Consult’s Land Price Index for the third quarter indicates that tenants are opting for cheaper units in the wake of the prevailing high cost of living and uncertainty in the economic environment.
Satellites towns with newly finished modern units, but with more affordable asking prices, are favourite for bargain hunters who led to increased asking prices for rents in Thika, Limuru, Mlolongo, Tigoni, Ongata Rongai, Kitengela and Ruaka metropolis between July and September.
Thika, which saw a 1.3 per cent rise in asking rent prices in the quarter, was the only satellite town that recorded a double-digit increase in apartment rents on an annual basis as tenants opt for affordability in the tough economic environment.
Asking rents for apartments in Thika increased by 13.3 per cent on an annual basis which is the strongest growth in the satellite towns while Tigoni recorded the strongest growth for house rents over the quarter at 3.5 per cent.
At Sh23,400, the average asking rents for apartments in Thika makes the satellite town the most affordable relative to other towns which augers well for tenants who are opting for affordable units as the tough economic conditions persist.
“Asking rents for a modern apartment may cost as little as Sh23,400 and this bodes well for many tenants who are now preferring affordable units as they take caution to save in the wake of job losses cross all sectors. Notably, as the cost of living soars, the lower middle class is opting to pay slightly more in transport but less in rents,” said Sakina Hassanali, Head of Research and Marketing at HassConsult.
Kiserian recorded the highest drop over the quarter with rents in the area reducing by 4.6 per cent while Athi River recorded the lowest annual growth rate for houses at 4.1 per cent.
Parklands was the best performing suburb with rents in the area increasing by 1.9 per cent over the quarter and 9.3 per cent annually. On the losing end Loresho recorded a 2.7 per cent drop over the quarter and 3.5 per cent over the year.
Overall asking rents dropped by 0.9 per cent over the quarter but marginally increased by 0.8 per cent on an annual basis.
On the sales front asking prices marginally rose by 0.9 per cent in the quarter led by the semi-detached housing segment which increased by 3.4 per cent over the period. Ridgeways recorded the highest quarterly increase in asking prices at 3.9 per cent over the quarter while Juja recorded the biggest drop at -7.8 per cent.