Property Reality Company (PRC), a Real Estate firm in Kenya, has released its second edition of the land Index. This report tracks changes in land prices across several locations on the outskirts of Nairobi.
Data from this report was conducted through a combination of Mystery visits to real estate firms, brokers, individual sellers & a review of property prices from several online resources. Demand for property is on the rice. This is majorly driven by an increasing middle class who have a very high disposable income and the rural urban migration across major town centers which places a lot of strain on the limited land available. The price increase is also influenced by land being a relatively less risky investment.
At present, there exists an information gap as to the current price changes of land with the available data concentrating of land available in affluent areas, well out of reach for the majority of the population. This has led to exploitation of consumers by most land sellers, selling well above the market rates. This report is aimed at enabling all the participants in the land buying process to make better informed decisions.
On average, the value of land increased by 17% during the two periods under review. Ruaka recorded the highest price increase of 125% with 1/8th of an acre retailing at an average price of Kshs. 18,000,000/= up from Kshs. 8,000,000/=. This was followed by Kiserian and Utawala at 42% & 32% respectively. Additional research conducted by PRC, where 660 respondents in Nairobi were surveyed shows that cost is a critical consideration factor in the purchase of land across all LSMs (Low, Mid & High).
Consequently, 81% of all land selling firms allow installment purchase with the 82% of the companies allowing up to 6 months payment terms. In addition, firms have partnered with financial service providers in order to advance credit to potential buyers at affordable rates. The recently enacted bill on interest rates is bound to increase the uptake of property as real estate is a relatively safe investment and the title deed can be used as a security for loans advanced. This will be one of the strategies used by financial providers to survive the cut-throat competition.