Traffic congestion and Availability of amenities such as roads are what determined how properties in Nairobi faired up in the last quarter of 2016.
Gigiri, Karen the best place to buy property in Nairobi, HassConsult
Gigiri emerged as the Suburb with Highest Quarterly Increase in Sales Price, recording 3.7 per cent rise over last quarter.
Asking prices across Nairobi suburbs rose by an average 1.2 per cent in the third quarter outpacing satellite towns which recorded 0.9 per cent increase over the same period according to the latest property index and Nairobi land price index released by real estate firm HassConsult.
“Built up areas attract more property buyers as opposed to less developed areas that tend to attract buyers who are looking to cash in on land price appreciation,” said Ms. Sakina Hassanali, Head of Research and Marketing at HassConsult.
On the rental front apartments commanded the highest increase in rents at 1.7 per cent while asking rents for detached rose by 0.9 per cent.
Within Nairobi, Westlands recorded the highest increase in asking rent in the third quarter at 2.2 per cent and on the tail end of the index was Kitisuru which recorded a -1.1 per cent drop in asking rents.
Langata is the suburb with the highest annual increase in rental price, experiencing a rise of 10.8 percent.
Westlands on the other hand is the Suburb with Lowest Annual Increase in Rental Price, only recording a drop of 2.2% over last year.
The capping of interest rates through the amendment of the Banking Act 2016 is expected to spur interest in properties as banks will be forced to reduce the rates they offer on customer deposits will result in the move of investment dollars to higher yielding assets.
“The capping of interest rates will have a twin effect on the property market by making credit to developers more affordable which in turn will reduce the cost of units coming into the market. At the other end reduced rates will give potential borrowers incentives to take up mortgages and other loan facilities,” said Ms. Hassanali.
Traditionally real estate has proven to be the most consistent asset in performance.
On the city's periphery, Ruiru recorded the highest increase in asking rents amongst satellite towns at 5 per cent while Kiserian witnessed the biggest dip with rents in the area dropping by 2 per cent.
Mlolongo on the outskirts of Nairobi on Mombasa Road has been rated the worst performing satellite town with average asking prices falling by 1.47 per cent over the fourth quarter.
It is followed by neighbouring Athi River, which saw a 0.2 per cent drop over the same period.
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