Land Appreciation Rate in Kenya.
What is Land Appreciation Rate in Kenya?
The land Appreciation Rate in Kenya refers to the increase in the value of land over a certain period. It is affected by several factors such as location, availability of social amenities, economic activities in the area, and the level of infrastructure development.
In recent years, the demand for land in Kenya has been on the rise, particularly in urban areas, leading to significant appreciation rates. Land values have increased due to the growing population, increased levels of urbanization, and expansion of the real estate sector.
Additionally, government initiatives such as the construction of roads and other infrastructure projects have contributed to the appreciation of land values in Kenya.
According to a report from 2019/2020, the land sector in Kenya recorded an 8-year CAGR of 13.5% and an annual capital appreciation of 1.5%, compared to the 0.3% recorded in 2018/2019.
This was attributed to increased demand for land mainly in the low-rise residential areas and satellite towns. The rate of appreciation of vacant land is much higher than the rate of appreciation of the built-up areas, at 40% annually and 10%, respectively.
Some areas with high land appreciation rates include Ruaka, Syokimau, Thika, Tigoni, Athi River, Juja, and Kiambu. However, it is important to note that land appreciation rates can vary greatly depending on the location and other factors.
According to a blog post by Saif Real Estate, the appreciation rate of built-up property versus vacant land in Kenya is significantly different. The appreciation rate of vacant land is 40% annually, while the appreciation rate of the built-up property is 10%.
This suggests that investing in vacant land in Kenya may be more profitable than investing in built-up property.
Fanaka Real Estate also notes that land is the most preferred investment in Kenya. The appreciation rate of land is one of the reasons why it is a popular investment choice.
However, Fanaka Real Estate advises that investors should always invest in the land before people start settling in an area. This is because the value of land tends to increase as demand for it increases.
According to the Global Property Guide, land prices in Nairobi rose slightly by 1.7% during the year to Q3 2019. While this is a modest increase, it suggests that land prices in Kenya are generally stable.
However, it is important to note that land appreciation rates can vary depending on the location and other factors. Investors should conduct thorough research before investing in land in Kenya.