One of the effects of the corona pandemic is the continued flattening of land prices in both the suburbs and satellite towns. In a report by Hass consult, there has been a decline in land prices since the second quarter of the year 2020. This report aimed to show the performance of real estate in various parts of Nairobi. However, as some parts of the city experienced a decline in their properties, some surfaced to be more productive.
The report indicated that on the general run, land worth had increased from Ksh 30 million in the last quarter of the year 2007 to Ksh 190.7 million by June 2020. What this means is that a person who had invested in a land with as low as 1 million in the year 2007 would have gained Ksh 8.98 million from the investment in the Nairobi satellite town while those in Nairobi suburbs would have gained Ksh 6.30 million.
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Donholm, one of the Nairobi suburbs recorded the highest quarterly land prices increase this year by 2.76% as Ongata Rongai recorded the highest land price increase for satellite towns by 1.26%. Other areas such as Gigiri, Kitisuru, Runda and Muthaiga land prices increased by 1.2%, 0.5%, 0.3% and 0.2% respectively.
After Ongata Rongai, satellite towns that recorded the highest increase in the land increase were Mlolongo by 0.5% and Kiserian by 0.4%.
Contrary to the above areas, some of the locations that recorded a drop in their land prices were parklands and Limuru. Parklands suburb registered a 2.74% drop while the Limuru, Nairobi satellite, registered a 3.9% drop in land prices. Limuru recorded the highest drop in the first quarter of the year, compared to a 3.4% drop in the year 2019.
Judging by the results of the research done, the head of development consulting and research at the company, Sakina Hassanali, noted that the price mild softening was a pointer that investors still view real estate as a tough industry over the long term. “The Covid-19 pandemic continues to disrupt the economy and as such investor interest has waned over the quarter but we are yet to see ‘fire sales’ on land as this asset class is still seen as the most resilient over the long term,”
Finally, the report listed Muthaiga as the highest gain annually among all the suburbs with 4.5% while Ruiru was the highest amongst towns with 5.16% of land prices increase. Upperhill was said to have the most expensive land in Nairobi with an acre going for 525.7 million while for the satellite, Ruaka had the most expensive land with an acre being worth 89.8 million.