Red-Hot Land Prices Drive Builders Out of Nairobi

The Nairobi property market is showing signs of slowing growth as developers shift to the city outskirts where bigger and more affordable land is available.

Jenga Web managing director Nathan Luesby says developers seeking to meet the rising demand for affordable housing are increasingly getting priced out of the market, pushing them to build gated communities away from Nairobi.

“Over the last five years land prices in parts of Nairobi have shot up by a thousand per cent, which is why we are seeing the rise of “super developments” where a developer buys a big chunk of land outside the city and puts a huge number of houses on it,” said Luesby.

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Market analysts say they expect a slowdown in the number of new construction projects in Nairobi after the depletion of land in city suburbs such as South B, South C, and Lang’ata.

“Developers have exhausted land in areas that would handle major housing projects towards the South of Nairobi and now most projects are coming up in satellite towns (where land is cheaper),” said Alex Mungai, a Nairobi-based property consultant.

The selling price for an acre of land in estates such as Kileleshwa and Kilimani is as much as Sh300 million – an amount that is way out of reach for many Kenyans.

“Doubts about ownership of land in areas such as Embakasi are also pushing investors outside Nairobi, to avoid burning their fingers,” he said.

Mr Mungai said Thika, Kiambu, and Kajiado are the main towns that have benefited most from the scarcity of land in Nairobi, citing their proximity to the city and the availability of more affordable expansive parcels of land in the towns.

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