Page 11 - BEA December 2019 - January 2020

Briefing
Tough economy pushing Nairobi

households to satellite towns

Lower middle-income households opt for long journeys home in search of cheaper
rent as the tough economic environment bites
andlords in satellites
towns with newly finished
Lmodern units, but with
more affordable asking prices, are
cashing in on unprecedented demand
for cheaper housing as the city’s
residents, reeling from the high cost
oaf living choose to balance the
desire for decent affordable housing
with spending more hours on the
road.

According to the Hass Property
Index third-quarter report, bargain
hunting in Thika, Limuru, Mlolongo,
Tigoni, Ongata Rongai, Kitengela and
Ruaka metropolis between July and
September led to increased asking Ms. Sakina Hassanali, Head of Research and Marketing at
prices for rents in these towns. HassConsult: as the cost of living soars, the lower middle class is
opting to pay slightly more in transport but less in rents
Thika was the only satellite town
that recorded a double-digit increase
in apartment rents on an annual basis, annually at 1.9 percent and 9.3 Kiserian recorded the highest
with the strongest annual growth rate percent respectively. drop over the quarter with rents in
in rents at 13.3 percent. the area reducing by 4.6 percent
According to the report, the while Athi River recorded the lowest
“Asking rents for a modern apart- tough economic conditions continue annual growth rate for houses at 4.1
ment may cost as little as Sh23,400 to weigh on the overall rental and percent.
and this bodes well for many tenants property sales markets with rental
who are now preferring affordable prices for all properties falling by Parklands was the best perform-
units as they take caution to save 0.9% in the quarter and asking house ing suburb with rents in the area
in the wake of job losses across all sale prices growing by 0.9% in the increasing by 1.9 percent over the
sectors. Notably, as the cost of living last three months. quarter and 9.3 percent annually. On
soars, the lower middle class is opt- the losing end, Loresho recorded a
ing to pay slightly more in transport Semi-detached posted stron- 2.7 percent drop over the quarter and
but less in rents,” said Ms. Sakina gest total returns at 13.54 percent 3.5 percent over the year.
Hassanali, Head of Research and (capital gains + rental yields) driven
Marketing at HassConsult. by investors who are preferring this Overall asking rents dropped by
midmarket over detached which is 0.9 percent over the quarter but mar-
Tigoni and Ongata Rongai record- pricier, and apartments where there is ginally increased by 0.8 percent on an
ed the highest asking prices in the oversupply and as a result rents being annual basis.
three months from August to October discounted to attract tenants.
at 3.5% and 3.1% respectively, due On the sales front asking prices
to their affordability relative to other Upperhill recorded price correc- marginally rose by 0.9 percent in
satellite towns. tion after the suburb saw a reversal in the quarter led by the semi-detached
prices after three-years, during which housing segment which increased
Kitengela, Mlolongo, Ruaka, and prices of apartments have been on a by 3.4 percent over the period.
Limuru also posted an increase in downward steep as discounts con- Ridgeways recorded the highest
asking rent prices. Parklands recorded tinue. Nyari and Loresho continued quarterly increase in asking prices
the strongest growth in apartment to benefit from the completion of the at 3.9 percent over the quarter while
rents in the quarter and Redhill Waiyaki way link road. Juja recorded the biggest drop at -7.8
percent.
Building East Africa | December / January 2020
Building East Africa | December / January 2020 A 9
Promoting sustainable development
Promoting sustainable development