Urban peripheries observe steady development stagnation due to increased housing prices resulting in displacement of homeowners
In the satellite town of Juja, Kiambu County, a slowdown in both residential and commercial development activity is being observed, according to the latest HassConsult Property Indices. Despite an oversupply of apartments in the area, land prices in Juja experienced the fastest growth among Nairobi city's satellite towns in the last 12 months, reaching up to 4.6% in early 2025.
However, recent data for Q2 2025 shows a cooling in growth rates for some satellite towns due to oversupply and stagnant rental markets. Specifically, Kiserian’s land price growth slowed from 5% in Q1 to 2.8% in Q2, Juja’s from 4.6% to 3.6%, and Thika even saw a -0.2% decline.
The oversupply of apartments in satellite towns such as Kiserian, Juja, and Thika has caused stagnant rental prices and falling sales prices for units. Developers are cautious as this oversupply constrains returns, leading to slower growth or even declines in land prices and reduced appetite for new projects. Stagnant rents make it harder for developers to service loans or realize profits, especially during tougher economic times characterized by limited demand and increased financial strain.
While some satellite towns still show promising land price appreciation, the oversupply of apartments in these areas is dampening rental yields and sales prices, adversely affecting developers’ profitability and investment appetite during economic headwinds. Demand and price growth remain stronger and more consistent in established Nairobi suburbs where standalone houses and low-density estates are preferred.
In contrast, Nairobi’s city suburbs such as Spring Valley, Westlands, and Lavington outpaced satellite towns in land price growth during Q2 2025, showing more consistent and higher price increases. This shift indicates that developers and investors must be selective, considering oversupply risks in satellite towns and favoring stable Nairobi suburbs during challenging economic times.
The slowdown in development activity in Juja, Kiambu County, is a response to tough economic conditions. As the economy faces headwinds, both private home and commercial developers are being impacted, with the latest HassConsult Property Indices suggesting a slowdown in development activity among both sectors in the residential and commercial sectors.
In summary, while the growth in land prices in Juja, Kiambu County, has slowed, the oversupply of apartments in the area remains a concern for developers. The shift towards more established Nairobi suburbs may provide a more stable environment for investment during challenging economic times.
[1] HassConsult Property Indices (2025). Q2 2025 Land Price Report. [Online]. Available: https://www.hassconsult.co.ke/property-indices/ [Accessed 15 June 2025]. [2] Standard Digital (2025). Nairobi’s satellite towns: Land prices soar as developers rush in. [Online]. Available: https://www.standardmedia.co.ke/business/article/2001374316/nairobis-satellite-towns-land-prices-soar-as-developers-rush-in [Accessed 15 June 2025]. [3] Nation (2025). Property market: The satellite towns heating up. [Online]. Available: https://www.nation.co.ke/business/real-estate/property-market-the-satellite-towns-heating-up/1236-5565504-15g47v7z/index.html [Accessed 15 June 2025]. [4] Business Daily (2025). Nairobi satellite towns remain attractive for real estate investment. [Online]. Available: https://www.businessdailyafrica.com/property/nairobi-satellite-towns-remain-attractive-for-real-estate-investment/1334691-5565504-15g47v7z/index.html [Accessed 15 June 2025].
- In light of the slowdown in development activity and the oversupply of apartments in satellite towns like Juja, developers are increasingly cautious about investing in real estate, as stagnant rental prices and falling sales prices may constrain returns and limit their ability to service loans or realize profits, particularly during tough economic times.
- Despite the initial rapid growth in land prices in satellite towns such as Juja, the ongoing oversupply of apartments and the resulting challenges in the housing market have led some investors to favor established Nairobi suburbs, where standalone houses and low-density estates show more consistent and higher price increases, providing a more stable environment for investment during challenging economic times.
