Land prices in Nairobi’s surrounding towns grew by 1.9% in the last quarter of 2024, marking the slowest pace of appreciation in 18 months, as high interest rates and job losses dampened purchasing power in a challenging economic environment.
A recent analysis of land prices by real estate firm HassConsult revealed that the average cost of an acre in the satellite towns rose to Sh30.9 million between October and December 2024. This increase was a slowdown from the previous quarter, when land prices had grown by 3.02%.
The 1.9% rise in Q4 was the smallest recorded since the June 2023 quarter, which saw a 1.22% increase. On an annual basis, land prices in the satellite towns grew by 10.6%, a slight increase from 9.3% in 2023, reflecting a stronger pace of growth in the first half of the year.
The slowdown in land price appreciation mirrors the broader economic conditions, with GDP growth decelerating over the year. In the first three quarters of 2024, Kenya’s GDP grew at rates of 5%, 4.6%, and 4%, down from 5.5%, 5.6%, and 6% in the corresponding periods of 2023.
“Periods of economic uncertainty and slower GDP growth often cause developers to delay land acquisition, reducing demand and subsequently curbing price growth,” said Sakina Hassanali, Head of Development Consulting and Research at HassConsult.
She also noted that the infrastructure-driven price boom in areas like Thika, Kiserian, Mlolongo, and Syokimau—areas that had seen sharp price jumps in previous quarters—appears to be waning.
Nine out of the 14 towns tracked by HassConsult showed slower quarter-on-quarter price increases, with Thika and Mlolongo experiencing the most notable declines. In these towns, growth slowed from 6.3% and 6.6% in the third quarter to just 0.9% and 1.1%, respectively, in the fourth quarter.
The demand for land in these outlying towns has primarily been driven by middle-class buyers seeking affordable plots for residential development. Commercial developers have also been active in these areas, building apartments and other facilities to cater to the growing middle-class market.
These towns offer a lower cost of land per acre compared to Nairobi’s suburbs. In contrast, land prices in the suburbs reached an average of Sh214.2 million per acre by December 2024.
Land prices in Nairobi’s suburbs grew by 6.5% in 2024, with demand from developers seeking space for apartment projects in areas like Parklands, Kileleshwa, and Lavington. On a quarterly basis, land prices in these areas increased by 1.7% in the final quarter of the year, a marginal improvement over the 1.6% growth seen in Q3.
Commercial land, especially in Nairobi’s business districts, remained the most expensive. In Upperhill, an acre of land cost Sh522.7 million, while in Westlands, the price was Sh487.3 million.
