Market News

Renters pay double for downtown apartments


A view of Nairobi’s central business district (CBD) on June 23, 2021. PHOTO | JEFF ANGOTE | NMG

Summary

  • The monthly rent for a one-bedroom house in the CBD is around $432.33 (Sh49,761) compared to $191.32 (Sh22,020) in the suburbs.
  • Location is the biggest determinant of house prices in capital cities, with prime properties in or near the CBD consistently outperforming those farther from the CBD.
  • Rental homes close to the CBD in Upper Hill, Muthaiga, Ngara and Westlands cost more than those in suburbs like Syokimau, Kitengela and Athi River.

Renting apartments in Nairobi’s central business district (CBD) can cost up to 126% more than renting properties on the outskirts of the capital, according to market and consumer data firm Statista.

The monthly rent for a one-bedroom house in the CBD is around $432.33 (Sh49,761) compared to $191.32 (Sh22,020) in the suburbs. A three-bedroom apartment in the CBD costs an average of $990.75 (Sh114,035) per month, while renting a similar property on the outskirts of the city costs $476.21 (Sh54,811).

“In Nairobi, Kenya, renting a one-bedroom apartment in the city center costs almost as much as a three-bedroom apartment outside the city center in 2022,” Statista said.

The data shows the high returns enjoyed by homeowners owning properties in central areas of the city. The returns are especially high for those who built or acquired the homes more than a decade ago, when construction costs and purchase prices were relatively lower.

Location is the biggest determinant of house prices in capital cities, with prime properties in or near the CBD consistently outperforming those farther from the CBD.

Rental homes close to the CBD in Upper Hill, Muthaiga, Ngara and Westlands cost more than those in suburbs like Syokimau, Kitengela and Athi River.

Those who live within the boundaries of a major city pay a premium for proximity to jobs and various social and economic facilities, including hospitals and restaurants.

Rents also reflect the relatively higher costs CBD property owners face when buying and maintaining units.

Those living in the suburbs benefit from cheaper homes at the cost of greater commuting distance, long hours in traffic, high fares on public transport vehicles to and from work, and higher fuel consumption. high for car owners.

Nairobi has become a CBD where most formal sector jobs and economic activities are concentrated.

Suburban expansion, however, reduced reliance on the CBD by creating local economic communities with their supermarkets, banks, and entertainment venues.

However, real estate in the heart of the capital continues to impose itself.

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