Property Sale Prices See Significant Growth in 2024 Amid Changing Market Trends
Property sale prices in Kenya recorded impressive growth in 2024, as detailed in the Hass Property Index Quarter Four Report 2024. According to the report, property values have increased by 5.13 times since 2001, driven by rising demand and evolving buyer preferences. This growth reflects a resilient real estate market, particularly in the mid-to-upper-class property segments.
The Hass Sales Index shows a 0.37 percent price increase in the last month, a 0.77 percent rise in the last quarter, and an annual growth of 5.23 percent. Detached houses led the market with the highest quarterly and annual price growth rates, while apartments and semi-detached houses showed varied performance. On average, the value of a property has risen from 7.1 million in December 2000 to 36.7 million in December 2024, underscoring the long-term strength of the market.
The report further highlights that 4-6 bedroom properties are now valued at an average of 40.6 million, while 1-3 bedroom properties average 13.0 million. These figures illustrate the growing demand for larger, standalone homes, which are increasingly seen as premium assets in the property market.
Key Market Shifts: Detached Houses Lead Growth
Detached houses continued to dominate market performance in 2024, recording a 1.5 percent quarterly price growth and an annual increase of 7.5 percent. These houses represent a limited but highly desirable segment, favored by buyers seeking privacy and spaciousness. This trend has been reinforced by the shrinking supply of standalone units, which accounted for just 7.2 percent of the market by December 2024, down from 52 percent in 2001.
Apartments, which have grown to represent 69.9 percent of the market, and semi-detached houses at 22.9 percent, showed mixed results. Apartment prices fell by 0.6 percent quarterly, but annual growth stood at 1.6 percent, while semi-detached houses saw a 0.8 percent quarterly decline but grew by 0.8 percent annually. The increasing dominance of apartments highlights shifting buyer preferences toward more affordable and accessible housing options, particularly in urban areas.
Regional trends reveal hotspots for growth, with Ridgeways and Loresho in the suburbs posting annual price gains of 12.5 percent and 11.6 percent, respectively. Juja emerged as a leader among satellite towns, with a 12.9 percent annual increase, demonstrating strong demand for properties outside the city center.
Rental Market and Long-Term Performance
The rental market in 2024 showed modest recovery, with asking prices rising by 0.2 percent in the fourth quarter, reversing the 0.6 percent decline in the third quarter. However, annual rental prices remained effectively flat, registering a -0.02 percent change, as landlords faced challenges adjusting rents amidst economic headwinds.
Detached houses showed resilience, with 0.5 percent quarterly rental growth and 0.6 percent annual growth, while apartments led the rental recovery in areas like Gigiri and Juja, where rental prices grew by 6.7 percent and 6.4 percent, respectively, over the quarter. These gains coincided with falling inflation, which improved tenants’ purchasing power and gave landlords some room to adjust rents upwards.
Despite positive trends in property sales and rental prices, overall property returns remained below other asset classes in 2024. Suburban yields stood at 7.2 percent, while satellite town yields were at 5.0 percent, compared to Treasury bill interest rates of 9.5 to 11 percent, presenting a more attractive alternative for investors.
Long-Term Trends in Kenya’s Real Estate Market
The Hass Property Index 2024 also provides valuable insights into long-term shifts in Kenya’s real estate market. Over the years, the composition of the property market has changed significantly, with apartments becoming the dominant property type. In 2001, apartments accounted for just 23.5 percent of the market, but by December 2024, this figure had grown to 69.9 percent, reflecting the increasing demand for affordable housing.
Semi-detached houses now represent 22.9 percent of the market, down slightly from 24.5 percent in 2001, while detached houses have seen the most dramatic decline, shrinking from 52 percent of the market in 2001 to just 7.2 percent in 2024. This shift highlights the growing urbanization and the need for more compact, affordable housing solutions in high-density areas.
In terms of property values, the average price of a 4-6 bedroom property has risen to 40.6 million, while 1-3 bedroom properties average 13.0 million. These figures underscore the premium buyers place on larger, standalone homes, which continue to attract high demand despite their shrinking market share.
Regional Highlights and Future Outlook
Several regions have stood out as leaders in property price growth in 2024. Ridgeways and Loresho topped the suburban market, with annual price increases of 12.5 percent and 11.6 percent, respectively. Among satellite towns, Juja recorded the highest annual growth at 12.9 percent, followed by Kiserian and Ongata Rongai, which posted gains of 8.7 percent and 8.1 percent, respectively.
In the rental market, Gigiri and Juja led the recovery, with quarterly rental price growth of 6.7 percent and 6.4 percent, respectively. These trends reflect strong demand for properties in areas that offer a balance of affordability, accessibility, and quality of life.
Looking ahead, the Hass Property Index 2024 report emphasizes the need for stakeholders to adapt to changing market dynamics. With apartments now dominating the market and detached houses becoming increasingly rare, developers and investors must align their strategies with evolving buyer preferences and economic conditions to capitalize on growth opportunities.
