Detached house prices in high-end suburbs outpaced apartments and semi-detached houses in the second quarter of this year, growing at the fastest quarterly pace in nine years, lifted by strong demand in the high-end market segment.
The Property Index report by real estate firm HassConsult shows that the price of a detached house in estates like Muthaiga, Karen and Runda rose five per cent, overtaking those of apartments (1.1 per cent) and other house types, a performance attributed to their scarcity in the second quarter of the year. Semi-detached house prices grew 1.3 per cent in the quarter under review.
A bungalow at Greenpark Estate.
Photo credit: Pool
A detached house is a standalone residential building that does not share any walls with neighbouring structures. It is a single-family dwelling that sits on its own plot of land, offering more privacy and space than attached or semi-detached homes.
“Detached house prices grew at their fastest quarterly pace in nine years, which also reflected in suburbs such as Muthaiga, Karen, and Runda—that are largely exclusive of apartments— reporting faster property price growth,” said Ms Sakina Hassanali, Co-CEO and Creative Director at HassConsult. “There is a general lack of supply of detached houses, leading to the increased prices.”
A bungalow at Greenpark Estate.
Photo credit: Pool
In annual terms, detached house sale prices grew 10.9 per cent, outpacing Treasury Bills.
“As an investment option, the improved annual price growth of 7.8 per cent for all property (and 10.9 per cent for detached houses) improved the competitiveness of property against other asset classes such as government Treasury bills, whose interest rates have now fallen to the 8.1 to 9.7 per cent level from 16 per cent a year ago,” added the HassConsult report.
In Muthaiga, houses reported a 13.7 per cent growth over the last year and 3.2 per cent in the quarter under review, making it the most rewarding location for investors.
Apartments in Upper Hill posted the lowest return of three per cent (3 per cent) over the last quarter, and those in Westlands lost investor money with a yield of (12.5 per cent) in the last twelve months.
The price of houses in the suburbs matches the land value, which has also grown at a faster pace in the second quarter of this year, overtaking those in the city’s satellite towns for the first time in five years.
These high prices for the city suburbs mean that the land is out of reach for the majority of would-be buyers except deep-pocketed commercial developers and high-net-worth individuals.
On average, the price of a property in Nairobi stood at Sh39.1 million by the end of June, with a four to six-bedroom property averaging Sh42.2 million and a one to three-bedroom property at an average of Sh12.9 million.
