Rent for properties in Nairobi and its environs showed moderate growth in the first quarter of 2024 as prime clients defied the tough economic conditions across the country.
In the latest Hass Consult Property Index, rental prices increased in Nairobi's 16 suburbs and 14 satellite towns, albeit on a marginal scale compared to the previous quarter.
Only houses in Muthaiga, Ridgeways recorded a decrease of 2.4 per cent and 1.3 per cent respectively.
According to the report, the growth in rental yields rose to 6.9 per cent in March 2024, as compared to 6.7 per cent in December 2023.
This was attributed to tough credit conditions following the increase of the base lending rate by the Central Bank of Kenya (CBK) from 12.5 per cent to 13 per cent.
This led to higher interest rates on loans and credit facilities and made it more expensive for business owners and consumers to borrow loans.
“The rise in asking prices moderated in the first quarter of the year as credit conditions tightened following the increase in the CBK's base lending rate to 13 percent, which has had the effect of sweeping liquidity from the market,” stated Sakina Hassanali, Head of Development, Consulting and Research at Hass Consult.
By the Numbers
According to the report, the rental price for a 1 bedroom unit has maintained an annual average rental price of Ksh14,000.
For those acquiring a 2-bedroomed property, the average annual rental price in the first quarter of 2024 was Ksh40,000, up from an average price of Ksh25,000 a decade ago.
From the report, Westlands emerged as the most attractive business centre, recording a 5.8 per cent increase in the rental price, outperforming other suburbs.
This was followed by Loresho (3.2 per cent), Nyari Estate ( 3.0 per cent), Kilimani (2.7 per cent), Runda (2.6 per cent) and Gigiri (2.4 per cent).
Since 2001, the trend of semi-detached houses and detached houses has gained prominence as more landlords seek to maximise the space allocated.
A semi-detached house entails two units with a shared wall, whereby each unit has its utilities, entrance and space. A detached house entails units that don't share a wall.
"In 2001, Apartments took up 23.5 per cent of the market, semi-detached took up 24.5 per cent of the market and detached houses took up 52 per cent of the market. In December 2023 however, Apartments took 67.7 per cent of the market, Semi-detached Houses took up 25.7 per cent of the market and Detached Houses took up 6.6 per cent of the market."
