Residential Land price appreciation in Kenya around Nairobi.2000 to 2013.

Residential Land price appreciation in Kenya around Nairobi.2000 to 2013.

High cost land.

Example. Karen, Runda.

High cost areas such as Karen and Runda had land price per acre at kes 3m in 2000.
5 years later in2005, the same acre sold for between kes 7m to kes 10m.

This represents 30% price appreciation per year.

Same land costed between 12 to 15m per acre 5 years later in 2010.
This represents 20% price appreciation per annum.

Currently, in 2013, the same land costs approximately kes 30m.

This represents 33% price appreciation per year.

A median estimate of 25% price appreciation for high cost land around Nairobi can be safely guestimated.

Middle cost land.

Example. Syokimau, Kitengela, Kiambu, Juja, Ruiru.

Middle cost land in Syokimau, Kiambu, Juja, Kitengela cost kes 300,000 per 1/8th acre or 2.4m per acre in 2000.
In 2005, land in the same areas costed kes 700,000 per 1/8th or 5.6m per acre.

This represents 30% annual price appreciation.

The same land costed kes 1.5m per 1/8th or kes 12m per acre in 2010.

This represents 23% annual price appreciation.

Currently, the same 1/8th acre is costing 2.5m per eighth or kes 20m per acre.

This represents 25% annual increment.

Low cost land.

Examples. Isinya, Joska Kangundo road, Juja farm, Naivasha.

In 2000, 1 acre land in these areas cost kes 50,000.

In 2005, the same acre costed kes 100,000.
This represents 20% annual price increment.

In 2010, the same acre costed kes 250,000.
This represents a 30% annual price increase.

Currently, in 2013, the same acre costs kes 400,000.
This represents a 20% annual land price increase.

Global Land price appreciation rates.

In South Africa, property appreciated at a rate of 20% only during the property boom of between 2000 and 2006.
In Texas, USA, the average annual rate of price increase for the last 20 years before 2010 was 8.9%.
http://michaelbluejay.com/house/appreciation.html

The average South African appreciation rate for property is 11%.
http://housepricesouthafrica.com/2011/01/27/what-will-average-property-prices-look-like-in-2050/

In Ontario, Canada, for the last 10 years, property appreciation was in the tune of 2.9% per annum.
http://www.neighborhoodscout.com/ca/ontario/rates/

In Las Vegas, USA, property appreciation for the last 10 years has been an average of -3% negative per annum.
http://www.neighborhoodscout.com/nv/las-vegas/rates/

This year, 2013, land prices in USA are estimated to appreciate to the tune of 15% per annum.
http://online.wsj.com/article/SB10001424127887323820304578412632432865220.html

Kenya Inflation rate.

In 2011, inflation rate in Kenya was 14%.
In 2012, the inflation rate was down to 10%.
http://www.indexmundi.com/kenya/inflation_rate_%28consumer_prices%29.html

Conclusion.

Government of Kenya ministry of lands and ministry of finance will need to work out solutions that reduce the high annual land price increase in Kenya. This will make land price affordable hence allowing many Kenyans acquire this important factor of production so as to in turn increase production hence lower inflation.
These current high land price appreciation is beneficial to the individual real estate investors, architects, engineers etc but form a fiscal economics angle, detrimental to the national economics.

Francis Gichuhi Kamau, Architect.
0721410684