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Land prices for the first quarter of this year have maintained an upward trajectory despite the tough economy and input costs for developers.

This is in accordance with HassConsult property index, which also shows that the land prices in Nairobi’s 18 suburbs rose by an average of 1.3 percent per acre in the first quarter, while in the satellite towns the price was up by an average of 3.03 percent.

HassConsult Head of Development, Consulting and Research Sakina Hassanali said the price of an acre in the suburbs rose by 5 percent on an annual basis while in the satellite towns it was up by 11.2 percent.

“The growth in prices across 17 of 18 suburbs, despite the slowdown in pace in the quarter compared to the last quarter of 2023, shows that the upper end of the market is sustaining demand,” said Hassanali.

According to HassConsult, Lavington and Spring Valley were ahead in price growth among suburbs in the first quarter at 4 percent and 3.8 percent respectively, while Kileleshwa was the only one to record a price decline at a marginal -0.1 percent.

The average price per acre in suburbs is now at Sh203.7 million, having crossed the Sh200 million mark for the first time in the last quarter of 2023.

For town,  Kiserian, Limuru and Ongata Rongai led quarterly price gains at 9.4 percent, 8.4 percent and 7.8 percent respectively.

“Satellite towns are driving the revival of land as a competitive asset class with the average annual growth of over 10 percent. With interest rates projected by the Central Bank of Kenya to fall in coming months, the stable price growth seen over the last two years should make land even more attractive as an asset,” she said.

She said satellite towns are now poised to overtake government Treasury Bills in annual returns.

 On an annual basis, 9 out of 14 satellite towns made double digit price gains, led by Ongata Rongai at 16 percent.

Developers have also shown a preference for areas whose prices are lower than the satellite town average of Sh28.8 million, as they keep an eye on overall costs due to higher building input prices.

The property index has also shown that Sh1 million invested at the end of 2007 would have been worth Sh11.79 million if invested in land in Nairobi Satellite-14, Sh6.73 million if invested in land in Nairobi Suburbs-18, Sh2.71 million if invested in property, Sh3.97 million if invested in bonds, Sh1.59 million if invested in savings and only Sh0.32 million if invested in equities.

Between January and March 2024, an acre of land in Kiserian was being sold at Sh11 million.

This rate is way below the average price of an acre of land in satellite towns which was quoted at Sh28 million.

An acre of land in other satellite towns such as Athi River, Kitengela, Limuru, Ngong and Thika was sold at Sh19.3 million, Sh16.8 million, Sh22.7 million, Ksh 34,9 million and Sh26.5 million respectively.

“In the towns, Kiserian, Limuru and Ongata Rongai led quarterly price gains at 9.4 per cent, 8.4 per cent and 7.8 per cent respectively.

“Satellite towns are driving the revival of land as a competitive asset class with an average annual growth of over 10 per cent. With interest rates projected by the Central Bank of Kenya to fall in coming months, the stable price growth seen over the last two years should make land even more attractive as an asset,” read the report in part.

“Developers have also shown a preference for areas whose prices are lower than the satellite town average of Ksh28.8 million, as they keep an eye on overall costs due to higher building input prices,” read the report in part.

In recent years, prices of various materials used for construction such as cement and steel have risen, a factor that has been influenced by global dynamics, exchange rates and government policies such as taxation.