The planned and ongoing construction of bypass roads in Nairobi has driven up land prices in nearby satellite towns to double digit for the first time since 2014, a survey shows.
The average asking price for land in satellite towns rose by 8.1 % in the second quarter of 2016 and 15.3% over the year.
The Hass Property Index report for the second quarter released yesterday has attributed the growth to price hikes on the recently announced Western bypass and land transactions involving completed bypasses.
“The price for land in Ruaka, for example, increased by a substantial 11.3 % in the quarter, catalyzed by investors who are positioning themselves ahead of the construction of bypasses that will further open up the satellite towns and make them more attractive to both buyers and developers,” HassConsult head of research and marketing Sakina Hassanali said.
“As we have seen from past results, road construction triggers land price appreciation.”
Land in Ruiru recorded the highest growth at 19.8 per cent over the second quarter with an average asking price of Sh19.1 million per acre, up from Sh15.4 million in March.
Limuru was second with 14.5 per cent average price increase with an acre averaging Sh17.2 million up from Sh14.7 million the previous quarter.
Prices in Juja rose by 13.6 % to Sh8.7 million an acre up from Sh7.3 million. Ruaka, which is still the most expensive satellite town, recorded an 11.3 % rise with an acre averaging Sh63.3 million up from Sh59.6 million.
Nairobi’s Upper Hill remains the most expensive area to buy land in the city where average asking prices in suburbs increased by 2.5 %.
Land in Upper Hill costs Sh517 million on average per acre, up from Sh511.3 million in March. Kilimani is the second most expensive city suburb to buy land, with an acre costing Sh430.3 million up from Sh425.7 million.