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Nairobi property prices rise the highest in Africa

homesReal estate prices in Nairobi’s high-end areas continued on an upward trajectory according to a global property survey of 28 cities done by Knight Frank.

The Knight Frank Prime Global Cities Index, for the second quarter of 2013, shows that Nairobi is ranked 11 in terms of price out of 28 cities and is the top African city followed by Cape Town which is ranked 28.

Data shows that between June 2012 and March 2013 property prices in up-market Nairobi increased by 8.4 per cent.

Data from the past quarter is yet to be fully included, unlike for most other cities surveyed, pending research from the local desk.

“The data is yet to be compiled,” Mr Ben Woodhams, the MD Knight Frank (Kenya), told the Business Daily last week.

Despite the absence of the second quarter results, Nairobi’s performance has remained relatively stable this year. In the first quarter Nairobi was ranked 10th and was still above Cape Town which was ranked 16th at the time.

Jakarta was ranked first in the latest index with property prices in the city rising by 27.2 per cent between June 2012 and June 2013, while struggling Madrid was ranked last with properties in its high-end areas declining by 11.9 per cent over the same period.

Nairobi was the top performer between 2011 and 2012 with the property sale price rising in double-digit figures.

The Wealth Report 2012 by Knight Frank and Citi ranked Nairobi top in a survey of 71 cities, with property prices increasing by 25 per cent in 2011.

Terrorism, high interest rates and political uncertainty however relegated Nairobi to number 13 in 2012’s ranking, with property prices rising by 10 per cent.

This year real-estate growth has slowed down due to the high interest rates of 2012 being carried forward. The election period has also had its impact but property consultants and lenders expect growth to accelerate from the second half.

While investors’ focus has been on the upper sector, the lower end of the market is in for a revamp.

The Nairobi County government says it will upgrade rundown estates and roll out quality and affordable housing for the low-end of the market.

Rehabilitate estates

Nairobi deputy governor Jonathan Mueke said that the county government was working on public private partnerships (PPP) that will rehabilitate estates in Eastlands covering an area of 4,000 acres.

“We are looking at Jericho, Kaloleni, Maringo, Ngara, Shauri Moyo, Pumwani and Eastlands,” said Mr Mueke at last week’s opening of CFC Stanbic Homes Expo.

Other arms of government have already embarked on upgrading low-end houses. State-owned National Housing Corporation (NHC) has pioneered upgrading of lower-income parts of the city from mid to high-end status.

NHC developed the Ngara Civil Servants Housing Estate near the Kenya Institute of Education (KIE) which has 656 apartments completed in October 2012.

The high-end sector is still attracting interest from property consultants with the latest entrant being Broll Property Group, a South African-based property management firm which began operations on August 1, 2013.

The setting up of shop by multinationals and their staff has created demand for high-end properties that match international standards.

Sale of or letting out such properties has been the main driver of prices in the market.

-Business Daily

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