Cytonn Investments has released a report that details the land prices for Nairobi’s metropolitan areas indicating an increase in asking prices.
For high rise residential areas, the asking prices had an annual capital appreciation of 4.8 percent and this with experts at Cytonn attributing it to the high returns in the areas, given that the areas allow densification.
Kahawa had the highest appreciation rates of 8.3 percent attributed to increased demand for land in the area from developers looking to cater for the middle-income and student population.
Embakasi recorded the lowest appreciation rates of 1.7 percent, attributable to
Low rise residential areas recorded an average price appreciation of 4.5 percent, which is 0.3 percent points lower than that of high rise residential areas, but higher than the 3.4 percent recorded in commercial zones.
Karen recorded the highest appreciation rates of 12.2 percent against a submarket average of 4.5 percent attributed to its affordability as compared to other low rise residential nodes, with an average price per acre of land in Karen being 52 million shillings against a market average of 87 million shillings for the low rise residential nodes.
In Nyari, the prices reduced by 0.1 percent attributed to the high land and house prices, with an acre of land in Nyari being 109 million against a market average of 87 million shillings hence less affordable as compared to the other low rise residential nodes.
Given the high land prices in these nodes with the exception of Karen, for these regions to experience a significant increase in prices, the zoning regulations need to be relaxed to allow for densification and thus more value can be derived per unit of land.