As the real estate industry in Nairobi continues to grow with new investments witnessed annually, several estates registered a decline in rental prices during the year.
Various real estate companies including HassConsult, have attributed the drop in rental prices to the availability of more rental units, and a shift in estate preference among others.
“Economic uncertainty pegged to rising costs, prospects of higher taxation and a higher cost of financing has resulted in reduced consumer confidence stalling speculative demand on real estate,” HassConsult indicated in its Q2 report.
An aerial view of a section of Kileleshwa Estate in Nairobi County.
According to HassConsult, Kileleshwa was the estate that witnessed a drop in the first three quarters of the year.
Real estate experts believe that the drop in rent has been occasioned by the mass exit from the estate that was considered posh at some point.
Tycoons are leaving the estate owing to the rise in highrise apartments being put up by private developers.
This is similarly the case for Karen which registered a drop in rent between July to September as more Tycoons opted for other estates such as Westlands and satellite towns.
Other posh estates that recorded a drop were Donholm, Parklands, Kilimani, Kitisuru, Lavington, and Muthaiga.
Apart from the posh estates, several neighbourhoods in the satellite towns also recorded a drop in rent prices.
The drop in the satellite towns was linked to the increasing developments being witnessed in the estates. It was revealed that the supply had outweighed the demand in the select areas.
Satellite towns that registered a drop include Juja, Tigoni, Kiambu, Kiserian, Limuru, Athi River, Ruiru,
Mlolongo and Thika also registered a drop in rental prices between July and August.
Conversely, some estates also registered a rise in demand for rental houses, forcing Landlords to increase the rates.
“Ngong Town and Ongata Rongai posted strong rental growth rates with Ngong Town posting a house rental price increase of 17.6 per cent in the last year and Ongata Rongai posting a 22 per cent apartment rental price increase between April to June,” read the report in part.
Limuru is also attracting Kenyans because of infrastructural developments.
An aerial photo of Ngong Road which connects Nairobi to Ngong Town.