Land prices on Thika Highway up, Mombasa Road hit by traffic jams
Property prices on Thika Road have escalated even as those in the vicinity of Mombasa Road continue suffering the effects of traffic congestion on the key international trade artery.
This is according to the latest property index and Nairobi land price index released Monday by real estate firm Hass Consult.
Land in Juja recorded the highest rise over the fourth quarter with the average asking price for an acre increasing by 6.3 per cent.
Juja, a fast-growing town 32.5 kilometres from Nairobi, was also the best performing satellite town on an annual basis with land appreciating by 51 per cent last year.
MLOLONGO WORST PERFORMING
In contrast, Mlolongo on the outskirts of Nairobi on Mombasa Road has been rated the worst performing satellite town with average asking prices falling by 1.47 per cent over the fourth quarter.
It is followed by neighbouring Athi River, which saw a 0.2 per cent drop over the same period.
“The drop in prices of these two satellite towns is attributed to their heavy congestion relative to other satellite towns,” said Hass Consult research and marketing manager Sakina Hassanali in Nairobi.
She noted new highways such as Thika provide substantial benefits to users in the form of travel time savings and reduction in costs associated with operating motor vehicles hence attracting huge demand from developers.
Other towns off the Thika Super Highway which witnessed a rise in land prices in the fourth quarter include Kiambu at 1.9 per cent, Ruaka (4.2 per cent) and Thika (four per cent).
“It is easier to get to Juja than to get to Mlolongo and people are following the new roads,” explained Ms Hassanali.
“It shows the effect of infrastructure on land prices. We initially saw land in Kiambu, Ruaka and Ruiru appreciate but now further down the Thika road land prices are increasing.
“It’s a good pointer for anyone who wants to buy land to always follow the road; not places that have already seen appreciation in prices as a result of the new road but further down,” said Ms Hassanali.
The survey shows that land prices in Nairobi recorded an 0.8 per cent increase in the fourth quarter and 5.1 per cent rise for the year, the lowest growth rates in eight years.
Satellite towns performed well with land prices rising by an average of 2.3 per cent in the fourth quarter of 2016 but a 21.8 per cent annual increase.
The trend was attributed to a slow down in the economy as well as a fourth quarter credit crunch arising from the rate capping law as banks shy away from lending to risky borrowers.