Land prices in Satellite towns show renewed up-cycle as Nairobi land stalls

Transcription

1 Land prices in Satellite towns show renewed up-cycle as Nairobi land stalls Nairobi suburbs register a 0.2 per cent growth over the quarter while satellite suburbs post a 2.4 per cent increase. Satellite towns offer pockets of opportunities for investors as Nairobi s land market is still to feel the effects of macroeconomic stability. Nairobi County housing scheme to potentially shift apartment pricing. Gigiri is the best performing suburb with asking prices increasing 4.8 per cent over the quarter while Juja is the top performer amongst satellite towns at 7.66 per cent. Donholm was the best performing suburb with land prices increasing by per cent over the year while Kitengela was the top performing satellite town with a per cent price appreciation Land Index Highlights: The Hass Composite Land Index, Nairobi Suburbs Nairobi-18 Index Results Quarter Annual Change From % 2.24% 6.25 Fold Suburb with Highest Quarterly Increase in Land Price Gigiri ( +4.8% over last quarter) Suburb with Highest Annual Increase in Land Price Donholm ( +11.9% over last year) Suburb with Lowest Quarterly Increase in Land Price Kilimani ( -1.9% over last quarter) Suburb with Lowest Annual Increase in Land Price Westlands ( -1.2% over last year) The Hass Composite Land Index, Nairobi Satellite Towns Nairobi Satellite-14 Index Results Quarter Annual Change From % 4.41% 8.41 Fold Suburb with Highest Quarterly Increase in Land Price Suburb with Highest Annual Increase in Land Price Suburb with Lowest Quarterly Increase in Land Price Suburb with Lowest Annual Increase in Land Price Juja (+7.7% over last quarter) Kitengela (+13.3% over last year) Mlolongo (-3.4% over last quarter) Thika (-6.9% over last year)

2 HassConsult today unveiled land price trends for the first quarter, showing that satellite have posted stronger returns in the quarter than suburbs revealing pockets of opportunity for investors after the 2017 lull in activity. Satellite towns saw a 2.4 per cent increase in asking prices while suburbs barely moved posting of 0.2 per cent indicating that prices in the 14 satellite towns were more vulnerable to election-related events than their equivalents in Nairobi. The swing in prices following stabilization of the macroeconomic and political environment shows there are possibilities for unlocking value in the satellite towns unlike Nairobi where prices remained relatively flat. Nairobi prices have been primarily driven by demand from developers and not speculators unlike the satellite towns and a slowdown in prices reflects a subdued housing market that is yet to recover, said Ms. Sakina Hassanali, Head of Development Consulting and Research at HassConsult. Juja was the top satellite town performer with land in the area rising by 7.66 per cent over the quarter while Gigiri was the top performing suburb with prices increasing by 4.8 per cent over the same period. On an annual basis Donholm was the best performing suburb with land prices increasing by per cent over the year while Kitengela was the best performing satellite town with prices increasing by per cent over the same period. Ms. Hassanali added that the plans for massive housing by the Nairobi County government that will see more efficient use of public land has the potential to shift pricing. Land in Nairobi contributes a significant portion of the unit cost of a house and by the county government offering developers of affordable housing free land, there is a likelihood of prices easing on the apartment market, said Ms. Hassanali. Other Nairobi suburbs that backed the trend of stagnating prices include Lavington and Nyari which posted 1.2 per cent rises in asking prices, a reversal from drops that the two high-end suburbs recorded in the preceding quarter. For more information, please contact: Sakina Hassanali, Head of Development Consulting & Research

3 Quarter Annual Change From 2007 Average Value Per Acre (KShs) 25 Percentile 75 Percentile Donholm 3.3 % 11.9 % ,600,000 55,000,000 84,100,000 Eastleigh 2.7 % 11.5 % ,000, ,000, ,900,000 Gigiri 4.8 % 3.2 % ,400, ,800, ,800,000 Karen 0.7 % 3.5 % ,000,000 52,800,000 65,000,000 Kileleshwa 1.6 % -0.1 % ,200, ,000, ,900,000 Kilimani -1.9 % 1.2 % ,600, ,000, ,000,000 Kitisuru 2.3 % 3.6 % ,800,000 70,000,000 90,000,000 Langata 2.5 % 5.3 % ,400,000 45,000,000 70,000,000 Lavington 1.2 % -0.3 % ,900, ,000, ,000,000 Loresho -0.1 % 1.9 % ,800,000 64,000,000 Muthaiga -1.4 % 3.5 % ,700, ,700,000 Nyari 1.2 % 1.0 % ,500,000 90,900, ,000,000 Parklands 0.2 % 0.8 % ,700, ,000, ,800,000 Ridgeways 2.2 % 0.6 % ,800,000 64,000,000 76,600,000 Runda 1.1 % 6.4 % ,100,000 70,000,000 Spring Valley -0.9 % 4.1 % ,700, ,100, ,000,000 Upperhill 0.8 % 2.5 % ,600, ,000, ,000,000 Westlands -1.3 % -1.2 % ,400, ,000, ,000,000 Quarter Annual Change From 2007 Average Value Per Acre (KShs) 25 Percentile 75 Percentile Athi River 3.0 % 6.4 % ,000,000 4,800,000 17,000,000 Juja 7.7 % 10.0 % ,300,000 3,900,000 16,700,000 Kiambu -1.0 % 2.9 % ,500,000 22,000,000 56,000,000 Kiserian 0.6 % 2.7 % ,300,000 3,500,000 10,000,000 Kitengela 0.4 % 13.3 % ,400,000 6,700,000 15,800,000 Limuru 3.5 % -0.4 % ,200,000 10,800,000 30,000,000 Mlolongo -3.4 % 0.8 % ,700,000 12,500,000 35,000,000 Ngong 1.1 % 4.0 % ,200,000 12,000,000 24,000,000 Ongata Rongai 5.7 % 6.1 % ,000,000 10,400,000 27,800,000 Ruaka 2.5 % 5.9 % ,200,000 65,400, ,900,000 Ruiru 5.3 % 6.5 % ,500,000 13,000,000 34,000,000 Syokimau -2.0 % 4.1 % ,700,000 14,000,000 26,000,000 Thika 0.0 % -6.9 % ,000,000 7,600,000 25,900,000 Tigoni 2.8 % 8.1 % ,200,000 17,000,000 30,000,000 Nairobi Suburbs Land Index Nairobi Satellite Town Land Index *Price Values rounded to nearest Kshs. 100,000

4 Land Index Heat Maps Nairobi-18 Suburbs Change in Prices Since Nairobi-14 Satellite Towns Change in Prices Since

5 Hass Land Composite Index Nairobi Suburbs -18 The Nairobi Suburbs-18 Land Index is representative of Land for Sale in Nairobi covering 18 highest activity suburbs Index December 2007 = Land values have increased by 6.25 fold since December Q1 - Average Land Price Nairobi Suburbs -18 The annual average is representative of the average price of land for sale in Nairobi covering 18 highest activity suburbs 200,000,000 Average Asking Price in KSh.s 180,000, ,000, ,000,000 The average value for land has gone from 30.3 million in December 2007 to million in March 120,000,000 80,000,000 60,000,000 40,000,000 20,000,000 Supply of Advertised Land Nairobi Suburbs % 1.7% 1.1% 0.9% 3.2% 6.5% 11.7% 30.4% 2.7% 3.3% 2.4% 2.8% 2.0% 6.8% 11.3% 4.5% 3.9% 3.8% Q1 0 Donholm Eastleigh Gigiri Karen Kileleshwa Kilimani Kitisuru Langata Lavington Loresho Muthaiga Nyari Parklands Ridgeways Runda Spring Valley Upperhill Westlands The Mix is a measure of the percentage that each suburb represents in the market for 18 Nairobi suburbs Land in Donholm took up 1.1% of the market, Eastleigh took up 1.1%, Gigiri 0.9%, Karen 30.4%, Kileleshwa 3.8% Kilimani 6.6%, Kitisuru 3.9%, Langata 4.5%, Lavington 11.3%, Loresho 2.0%, Muthaiga 2.8%, Nyari 2.4%, Parklands 3.3%, Ridgeways 2.7%, Runda 11.7%, Spring Valley 1.7%, Upperhill 3.2% and Westlands 6.5% respectively

6 Hass Land Composite Index Nairobi Satellite -14 The Nairobi Satellite-14 Land Index is representative of Land for Sale in 14 Satellite towns outside Nairobi Index December 2009 = Land values have increased by 8.41 fold since December Q1 - Average Land Price Nairobi Satellite -14 The annual average is representative of the average price of land for sale outside Nairobi covering 14 highest activity Satellite towns Average Asking Price in KSh.s 25,000,000 20,000,000 The average value for land has gone from 2.4 million in December 2007 to 20.6 million in March 15,000,000 10,000,000 5,000,000 Q1 0 Supply of Advertised Land Nairobi Satellite % 4.2% 9.6% 6.2% 8.9% 5.5% 15.8% 2.8% 5.3% 19.2% 8.3% 7.1% 1.9% 4.1% Athi River Juja Kiambu Kiserian Kitengela Limuru Mlolongo Ngong Ongata Rongai Ruaka Ruiru Syokimau Thika Tigoni The Mix is a measure of the percentage that each town represents in the market for the Nairobi 14 Satellite towns Land in Athi River took up 6.1% of the market, Juja took up 8.9%, Kiambu 5.5%, Kiserian 5.3%, Kitengela 19.2% Limuru 4.1%, Mlolongo 1.9%, Ngong 7.1%, Ongata Rongai 8.3%, Ruaka 2.8%, Ruiru 15.8%, Syokimau 4.2%, Thika 9.6% and Tigoni 1.1% respectively.

7 Land as an Investment The Hass Land Composite Index, Nairobi Satellite-14 index value was outperforming Nairobi Suburbs-18 which had an index value of 624.6, compared to Cattle which had a value of 118.3, Gold and Crude Oil worst performing with only 72.6 index value. Nairobi Suburbs-18 Nairobi Satellite-14 Crude Oil Live Cattle (CME) Q Index Dec 2007 = 100 Land Performance vs Commodities Gold Land Performance vs Other Asset Classes (The Growth of Kshs. 1,000,000 invested on 2000 Dec) 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 Nairobi Suburbs-18 Equities Savings Nairobi Satellite-14 Bonds Q1 0 Ksh. 1 million invested at the end of 2007 would have been worth KSh. 8.41m if invested in land in Nairobi Satellite-14, KSh. 6.25m if invested in land in Nairobi Suburb-18, KSh. 2.33m if invested in property (The Hass Sales Composite Index, All Properties), Ksh. 2.40m if invested in bonds and KSh. 1.25m if invested in savings and only Ksh. 0.71m if invested in Equities Property Inflation