Karen & Westlands Join List of Nairobi Estates with Falling Rents

In the final quarter of last year, Nairobi's real estate market underwent a notable shift, characterized by a decrease in rental prices across several suburban and satellite towns.

A report released by Hass Consult on January 22 reveals that prominent areas such as Karen, Kileleshwa, Muthaiga, Nyari Estate, Runda, Westlands, Kiserian, Ngong, and Tigoni experienced drops in rental costs. The report indicates that Ngong and Nyari Estate recorded the steepest declines, with rents falling by 2.4 percent, while Muthaiga faced a 1.4 percent decrease. These reductions are largely attributed to challenging economic conditions, which have compelled landlords to offer more competitive rental rates to attract tenants.

Conversely, certain neighbourhoods, including Gigiri and Juja, saw significant increases in rental prices, with Gigiri leading the way with a remarkable surge of 6.7 percent. Juja and Athi River followed closely, recording hikes of 6.4 percent and 5.7 percent, respectively. Rental growth was also observed in other regions such as Kitisuru, Lang’ata, Loresho, Lavington, Limuru, Ongata Rongai, Ruiru, Kiambu Town, and Kitengela.

According to Sakina Hassanali, Head of Development Consulting and Research at HassConsult, the rising rental prices in these areas can be credited to a declining inflation rate, which has improved tenants' purchasing power, allowing landlords to increase rents accordingly. The report also highlights a surge in the buying of houses and apartments across Nairobi, notably in Loresho, Ridgeways, and Runda.

Detached houses have shown strong performance, both quarterly and annually, due to their limited availability. In contrast, the growing supply of multi-dwelling units, such as apartments, has led to dampened price growth within this segment. Overall, the report illustrates a robust annual increase in housing prices, attributed primarily to detached homes, which saw a quarter-on-quarter growth of 1.5 percent and a year-on-year rise of 7.5 percent.

However, the prices of semi-detached homes and apartments faced downward pressure in the fourth quarter, decreasing by 0.8 percent and 0.6 percent, respectively. These findings reflect the multifaceted dynamics within Nairobi's real estate market, highlighting the broader economic challenges and opportunities that influence rental and purchasing trends.