Apartment rental prices last year rose at the fastest pace in nine years, boosted by double-digit increase in Nairobi’s Westlands, Langata, Parklands and Ruaka yields as the gap between demand and supply closed.
Realtors HassConsult’s 2018 property index indicated a sharp recovery in rental asking price for apartments in Nairobi in the last quarter of last year boosting the annual growth to 15.9 percent.
This outpaced the annual rental growth for semi-detached and detached houses, which stood at 12.6 percent and 3.7 percent respectively.
“The somewhat slower pace of apartment building in the last two years has finally seen demand catching up with the available space, lifting occupancy and driving apartment rents upwards sharply by November and December 2019,” said HassConsult head of development, consulting and research Sakina Hassanali on Thursday.
“Overall, apartment rental prices rose by 15.9 percent, which was the most marked rise since mid-2009…Detached house rental prices, however, continued to be affected by subdued global demand and the contraction in global grant-based activities.”
The average rental price increase across all property segments stood at 8.6 percent.
Asking rents for apartments in Westlands rose by 14 per cent last year, leading other suburbs such as Langata at 13.7 percent, Parklands at 13.5 percent and Kileleshwa at 9.4 percent.
Among the satellite areas, Ruaka saw the highest rental increase for apartments at 13.3 percent, followed by Thika at 12.5 percent.
While rental yields rose sharply however, growth in sale prices for apartments remained relatively low, at just 2.9 per cent.
Sales prices across the other segments was more pronounced, going up by 9.5 percent for semi-detached and 9.7 percent for detached houses.
Ms Hassanali attributed this to the difficulty that first-time homebuyers—who would normally drive the apartment segment—face in accessing mortgages and home loans in the era of the rate cap.
