Rent in Upmarket Nairobi Estates Falls as Kenyans Move Away from the City - Report

A new report has shown that most people in the Nairobi Metropolitan area are choosing to live in satellite towns such as Juja, Ongata Rongai, and Kitengela.

This shift comes as property and rental prices in these areas remain competitive compared to Nairobi's suburbs that have traditionally attracted upmarket rental prices.

According to a report release by Hass Consult on the rental and housing pricing trends between June and September 2024, Juja had the highest increase in housing sales prices at 3.5%.

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Ongata Rongai and Kiambu town also experienced sales price growth of 1.8% and 1.5%, respectively. Rental prices in these towns also showed significant increases, with Kitengela recording the highest rental price growth at 6.7%, followed by Ruiru at 2.8%, Kiambu at 2.3%, and Athi River at 2.0%.

Meanwhile, property prices in Nairobi suburbs stagnated, with only slight increases or even declines in both sales and rental prices.

Upmarket suburbs like Karen, Kileleshwa, and Westlands saw minimal growth in sales prices, while areas such as Gigiri, Kitisuru, and Runda experienced decreases. For instance, sales prices in Gigiri fell by 2.0%, while Kitisuru and Runda saw reductions of 1.2% and 0.2%, respectively.

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Rental prices followed a similar trend, with Gigiri being the only Nairobi suburb to experience a drop in rental rates, declining by 0.8%. Other areas like Ridgeways, Westlands, and Kileleshwa saw modest increases in rental prices of between 0.7% and 1.3%, but the overall growth in rental rates was less dynamic than in the satellite towns.

The slowdown in property appreciation within Nairobi’s suburbs, coupled with higher living costs, has driven many residents to seek housing options in the surrounding towns, where prices remain more affordable.

Property sales in areas like Kitengela and Ruaka dropped by 4.0% and 1.6%, respectively, indicating a shift in demand towards the more affordable satellite towns.

Despite this trend, the real estate market is expected to recover in the coming months due to reduced inflation, lower interest rates, and improved purchasing power, which may balance demand between Nairobi’s suburbs and the satellite towns.