Property prices in Nairobi’s established residential suburbs recorded their strongest quarterly growth in four years in the third quarter of 2026, driven by limited housing supply, lower borrowing costs and improving credit conditions.
According to the latest HassConsult Property Price Index, average suburban property asking prices increased by 2.3 per cent to KES 33.88 million, up from 0.9 per cent in the second quarter. The latest performance represents the highest quarterly appreciation since September 2022.
Spring Valley led the price growth, recording a 6.8 per cent increase to an average asking price of KES 79.4 million. Westlands followed with a 5.9 per cent rise to KES 64.5 million, while Muthaiga recorded a 5.5 per cent increase to KES 118.1 million.
Karen and Loresho each registered 5.2 per cent growth, pushing their average house asking prices to KES 119.3 million and KES 86 million, respectively.
HassConsult Co-CEO and Creative Director Sakina Hassanali attributed the stronger performance to improving financial conditions, noting that lower borrowing costs and increased private-sector lending were creating a more supportive environment for property investment.
Central Bank of Kenya data shows that average commercial bank lending rates declined from 17.2 per cent in November 2024 to 14.4 per cent in September 2026. Meanwhile, annual private-sector credit growth reached 10.6 per cent in September.
The rental market also recorded stronger performance, with suburban rental asking prices increasing by 2.7 per cent during the quarter, compared with 1.4 per cent in the previous three months.
Loresho recorded the highest rental appreciation at 6.2 per cent, with average monthly house rents reaching KES 338,100. Kitisuru followed with a 5.1 per cent increase to KES 350,100, while Muthaiga recorded 4.5 per cent growth to KES 370,900. Gigiri registered a 3.9 per cent increase to KES 402,100.
Hassanali said growing United Nations operations and the gradual relocation of personnel to Nairobi were providing additional rental demand in established diplomatic and international residential neighbourhoods.
However, property prices in satellite towns continued to decline, highlighting the growing differences across Nairobi’s residential market.
Average asking prices in satellite towns fell by 0.6 per cent to KES 14.43 million for the second consecutive quarter. Ngong recorded a 1.2 per cent decline to KES 19.1 million, followed by Ongata Rongai, where prices dropped by 1 per cent to KES 15.4 million.
Juja registered a 0.6 per cent decline to KES 12.8 million, while Kitengela recorded a 0.5 per cent drop to KES 13.2 million. Rental asking-price growth in satellite towns also slowed to 0.4 per cent from 1.1 per cent in the previous quarter.
The contrasting trends point to an increasingly divided residential property market, with established suburbs benefiting from constrained housing supply and stronger demand, while satellite towns face affordability pressures and competition from alternative housing developments.