Mixed bag of fortunes for real estate sector
Hass Consult head of research and marketing Sakina Hassanali (right) and Stanlib Bank regional head of business development Felix Gichaga during the launch of the Nairobi land price index quarter four of 2014 and the release of the 2015 fourth quarter Hass Property Index on January 29, 2015 at the Hilton Hotel in Nairobi. SALATON NJAU |
What you need to know:
- Hass Consult research and marketing manager Sakina Hassanali said the trend in land prices in Nairobi had changed due to emerging property hot spots and infrastructural projects in some areas traditionally underdeveloped.
- The report by HassConsult and Stanlib Investment managers covered 18 suburbs, up from the usual nine, bringing the overall average land price in the city down marginally to Sh166.4 million per acre.
- These are the areas that have not experienced intensive development, but are gathering momentum. Highest returns now come from being ahead of the curve,” Mr Muratha said.
There were mixed fortunes for both buyers and sellers in real estate during the first quarter of this year. On the one hand, land prices rose slightly, while on the other, those of residential properties fell by a small margin.
Land prices averagely increased by 17.6 per cent in the year to March, compared to 4.5 per cent in the previous quarter. Buyers are now paying 5.5 times more compared to December 2007.
CONTINUOUSLY CHANGED
Hass Consult research and marketing manager Sakina Hassanali said the trend in land prices in Nairobi had changed due to emerging property hot spots and infrastructural projects in some areas traditionally underdeveloped.
“Unlike in the previous years where certain areas were known to be high value areas, property investors today have to carefully map areas with potential upgrades to realise meaningful returns from property value increases. Places such as Ridgeways and Loresho have had the fastest land price rises due to the same reasons,” Ms Hassanali said.
Commercial areas remain far more expensive than residential sites with low end, high density places fetching almost 10 times the price of high end, low density acreage.
The report by HassConsult and Stanlib Investment managers covered 18 suburbs, up from the usual nine, bringing the overall average land price in the city down marginally to Sh166.4 million per acre.
CLEAR SIGHT OF DEVELOPMENT
Stanlib East Africa director James Muratha said land investment now required clear sight of development activity and an eye for areas still holding any under-valuation.
“That some city suburbs like Ridgeways appreciated by 41.4 per cent and Loresho, 41 per cent in the last 12 months, and given that they are in the mid-level activity bracket, means investors must now start buying into areas slightly ahead of the curve.
These are the areas that have not experienced intensive development, but are gathering momentum. Highest returns now come from being ahead of the curve,” Mr Muratha said.
