Demand for residential property in Nairobi’s upmarket Karen suburb surged significantly, while Runda suffered a drop, in a new survey that confirms class still reigns supreme when it comes to places to stay in the capital.
According to Data Fintech, which conducted research in the two high-end estates between the second quarter of 2016 and the second quarter of 2017, effective demand in Karen increased by 61.7%, which has led to the number of listings for both sale property and rent to decline from the increased uptake.
On the other hand, there was a decline in effective demand in Runda by 66.7% over the same period, which has led to majority of property agents dropping prices in a bid to attract demand from both individuals and investors.
The research was aimed at establishing affordability and effective demand in Karen and Runda, which are the most admired residential places in Nairobi, where who is who in Kenya resides.
The research states that the median price for a four-bedroom house remained constant in Karen at Ksh75 million but declined in Runda by 22% up to Ksh78 million attributed to the aforementioned effective demand rates in both estates.
Currently, Karen has 11 units of four-bedroom mansions listed for sale, down from 15 in the second quarter of 2016, reflecting a 26.7% drop. On the other hand, Runda has five similar units listed for sale up from four, reflecting a 25% increase.
In terms of rental listing, Runda has 40 units, up from 11 in the second quarter of 2016, showing a 263.6% increase. Unlike Runda, Karen has 17 units listed for renting down from 21, reflecting a 19% decline.
“For any investor looking to buy a house in either of these posh and leafy suburbs, Karen would be the best considering that it is cheaper compared to Runda. The prices of houses for rent and for sale in Karen are lower than those in Runda,” states the report.
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However, for those that are looking to buy a four-bedroom apartment in either of these locations to rent out, Runda would be the best bet as a one-year rental yield for a four-bedroom apartment in Runda in the second quarter 2017 increased by 4.2%.
According to research by Daily Nation in January this year, Karen and Runda, were found to be the best performing high-end residential markets. This was attributed to their proximity to shopping malls, good infrastructure and strict zoning regulations.
In the modern era where decent, affordable housing is the talk of every city, Nairobi is not an exception. Everyone wants to live in the leafy suburbs, in a multi-bedroom house he/she either owns or pays affordable rent.
On their side, investors want to buy such houses where they can make bigger profits, hence the question of effective demand comes in.