Nairobi: HassConsult today published the Hass Property Price Indices for the second quarter of 2026, portraying the resilience of Nairobi’s residential market despite moderating sale price growth as the gap between Nairobi’s suburbs and satellite towns persisted. While the suburbs continued to record positive price growth, satellite towns remained under pressure even as rental demand stayed resilient across both markets.
According to Kenya News Agency, Sakina Hassanali, the Co-CEO and Creative Director of HassConsult highlighted that the average property prices in the suburbs grew by 0.9 percent to Sh33.1 million in the second quarter, compared to 1.1 percent growth in the first quarter of the year. In satellite towns, she pointed out that sale prices declined by 0.6 percent to KES.14.52 million, an improvement from the 0.9 percent contraction recorded in the previous quarter.
Notably, the continued growth in Nairobi’s suburbs was driven by broad-based price growth across all 14 surveyed suburbs, led by Ridgeways at 3.4 percent to Sh85.2 million, Karen at 3.2 percent to KES.113.4 million and Lavington at 3.1 percent to Sh82.5 million. In contrast, satellite towns remained the weaker-performing segment of the residential market. Eight out of 10 towns recorded declining house prices, led by Ongata Rongai at negative 2.7 percent to KES.15.6 million and Ngong at negative 2.5 percent to Sh.19.4 million, while six out of nine satellite apartment markets also recorded price declines during the quarter.
‘Despite resilient occupier demand, satellite towns continue to face greater price pressure than Nairobi’s suburbs, reflecting the sensitivity of their buyer base to rising household costs and tighter economic conditions,’ observed Hassanali in a press statement. According to the Co-CEO, the second quarter was characterised by a sharp acceleration in inflation, which rose from 4.4 percent in March to 6.7 percent in May before easing slightly to 6.4 percent in June, placing additional pressure on household purchasing power during the period.
In the rental market, prices in Nairobi’s suburbs grew by 1.4 percent in the second quarter of 2026, while rents in satellite towns expanded by 1.1 percent. To this regard, Hassanali noted that the suburbs market was led by quarterly rental growth in Runda at 3.4 percent and Ridgeways at 3.2 percent whereas apartments in Ongata Rongai, Athi River and Mlolongo recorded the strongest rental growth among satellite towns at 3.5 percent, 3.2 percent and 3.0 percent respectively.
On the other hand, overall property yields in the suburbs remained unchanged at 7.4 percent in the second quarter, while satellite town property yields increased to 5.4 percent from 5.3 percent in the first quarter. Consequently, annual property returns, a combination of price growth and rental yield, remained a standout feature of the market, with double-digit returns continuing to compete favourably against government bonds and Treasury bills paying between 7.4 percent and 14.0 percent this year.
On the whole, Hassanali established that the resilience of the rental market reflects Kenya’s structural housing deficit. She outlined that Kenya’s rapid population growth, continued urbanization, and low mortgage penetration mean housing demand is expected to remain fundamentally underpinned over the long term, even as individual market segments move through different phases of the property cycle.
‘The softening of sale prices in satellite towns should be viewed within the context of the property cycle rather than as a weakening of underlying housing demand. While Kenya’s long-term housing fundamentals remain intact, individual towns increasingly respond to their own supply and demand dynamics as they mature,’ Hassanali advised. She said that the sustained growth in rental prices, together with resilient yields, indicates that underlying housing demand remains healthy despite the challenging economic environment.
