Plots at Ridgeways and Loresho areas have appreciated as other city suburbs showed signs of calming off. The Nairobi Land Index by Hass Consult and Stanlib Investments display between March 2013 and March 2014 the average price of land in Ridgeways and Loresho rose by 41.4 per cent and 41 per cent, well on top of the 17.6 per cent average for 18 suburbs making the index go up.
The report found that the cost of an acre of land in Ridgeways as at the end of March was Sh64.9 million while unalike plot in Loresho was being sold for Sh70.7 million. The road network that has opened up Ridgeways including the northern by-pass is the main reason for the land’s price appreciation.
“The enhancement in infrastructure around this area has really promoted Ridgeways,” said Mr. Muratha. He added prices in the area have also grown as a result of the suburb neighboring the diplomatic blue zone of Gigiri and Runda.
The current Nairobi Land Index report, however, said that while average land prices in major suburbs are still rising, the pace has generally decelerated. The average price of land in Nairobi had grown by 17.9 per cent in 2014 that is below the 42.5 per cent growth seen in 2009. The slow pace is a result of major suburbs entering the mature phase of development. Mr. Muratha expects investors to become fussy on where to buy land since strong land price growth is not guaranteed for all suburbs.
“These results highlight the degree to which selecting the right location for land investments is now demanding to reinstate. As the index exposes, almost any land purchase across Nairobi would have made very high returns in 2008 and 2009.”
Land prices in Eastleigh and Runda had annual returns of 1.5 per cent and 7.5 per cent therefore those are lower than other asset classes such as stocks and bonds. Documents from the Nairobi Land Index illustrates the average price of an acre in Eastleigh was Sh292.6 million while the same size of land in Runda was priced at Sh67 million. Karen, Kileleshwa, Kilimani, Langata, Lavington, Spring Valley, Upper hill, Westlands, Donholm, Kitisuru, Gigiri, Muthaiga, Loresho, Nyari and Parklands were the other suburbs included in the report. Upperhill was the priciest suburb with an acre selling for Sh484.8 million as at March this year.
On average prices in Nairobi have risen by 549.9 per cent since 2007. The current slow r is, however, expected to give buyers a reprieve in the long-term since cost of land as a percentage of the development will reduce.