Factors Driving Up Real Estate Market in Nakuru City
Do you know what actually drives up the real estate market in an area? Well, various factors influence the prices of real estate products either houses or land in a local area, county, and country at large.
To get a deeper understanding, it is important to break down all the aspects. This helps point out how each of them affects the sector either positively or negatively.
This is because not all factors influence real estate prices positively. Some have a negative impact on the same.
a) Prevailing economic conditions
Across the globe, two main things define the state of any economy and that is the rate of employment and inflation. When people have jobs and businesses are thriving, the population is well able to invest in real estate products namely housing or vacant land.
However, the prevailing conditions change from time to time, and as such when an economy is exhibiting positive growth chances are high that the populace will invest in real estate.
In Nakuru for example, the new city has been attracting investors from all over in terms of NGOs, industries, and local companies. This continues to create employment opportunities for residents who in turn invest in real estate products.
b) Government factors
There are several governmental factors that affect the real estate market and this cuts across all areas. In Nakuru these are some of the factors;
i) Laws and regulations
Nakuru has more favorable business requirements compared to Nairobi. In recent data, the city was ranked among the best areas for small businesses by Kenya Manufacturers Association.
This is because of the ease of accessing licenses and a friendly business environment. To open a small shop in Nakuru, you are required to pay Ksh 4,000 to the county compared to Ksh 15,000 in Nairobi.
Further, the transport costs in Nairobi are higher compared to Nakuru. All these have made the demand for office spaces in Nakuru increase as businessmen and women looking for the best location.
ii) Prices of household goods
Nakuru is majorly an agricultural area and as such food commodities are cheaper. This means that residents have more disposable income that can be channeled to investments.
ii) Environmental factors
Environmental factors are wide-ranging from weather, soil type, pollutants, light, etc.
Nakuru enjoys good weather throughout the year and the soil is largely loam soil which is favorable for agriculture and less prone to flooding.
As such, many people are looking for agricultural land in this area where they can plant food crops and cash crops.
Notably, Nakuru City is a large producer of horticultural produce for export.
iii) Interest rates
The average mortgage rate in Kenya is 12% and this directly affects homeownership.
While this may not be different for Nakuru in specific, Nakuru has relatively affordable real estate prices compared to Nairobi where properties are pricier.
As such, an average Kenyan can take up a mortgage or a home loan and invest in a real estate product in Nakuru and pay it in few years compared to Nairobi.
b) Progressive Fiscal Growth
From Kenya Bureaus of Statistics, Nakuru City has the second-highest GDP rate in Kenya compared to Nairobi City. This growth is directly influenced by sectors such as farming, energy, in this case, geothermal in the Naivasha area, tourism as a result of major tourist sites in Nakuru City, and industries around the city.
This directly leads to more demand for real estate products for holiday homes in an area such as Naivasha thus positively influence the prices.
c) Impact of devolution
The promulgation of the new constitution brought services closer to the people, community, and local businesses. People are now able to access services without having to travel to the capital city.
The devolution of Nakuru to a county and now upgrading to a city has impacted it in several ways. One of the ways is that more business people have opened up businesses. Others have opened branches in this city. Some of them include supermarkets, industries, companies, etc.
Government offices have also been opened such as Huduma Centre, County Government offices, etc. This has positively led to an increase in demand for office spaces, retail spaces, and housing units.
This has, in turn, created more demand for real estate products around the city
d) Population
From the 2019 Census, Nakuru City has a population of over 2.1M people making it the third most populated area in Kenya. This is after Nairobi and Kiambu. This is due to its cosmopolitan nature where a majority of Kenyan tribes reside here.
Globally, an increase in population directly leads to an increase in demand for real estate products either commercial or residential.
With this in mind, Nakuru has witnessed a rise in demand for residential units and commercial units.
e) Infrastructure Network
In September of this year, the expansion of the Nakuru – Mau Summit is set to begin. Kenya Urban-Rural Authority (KURA) has also been upgrading roads within Nakuru city and its environs at a cost of Ksh 1.8B.
Nakuru airstrip is also being expanded to international standards.
Further, industries have been opening up in Nakuru such as Simba Cement and fertilizer factories and existing ones such as Menengai are still going on with operation.
Additionally, this not only attracts more population in an area as a result of employment but also leads to growth of that area in terms of housing units.
f) Upcoming satellite towns
Nakuru city has both old and new upcoming estates.
Some estates in Nakuru include;
Ngata
This is a famous town as you exit Nakuru along Nakuru – Eldoret highway. Ngata has seen a rise in demand for plots and houses for sale over the last couple of years. One of the most noticeable landmarks is the Ngata bridge.
Sobea
Sobea is also a town along Nakuru Eldoret highway. It is approximately 18kms from Nakuru CBD. For better understanding of the town, you can explore Nakuru Sobea map for ease of navigation. Sobea estate has also been a top area with houses and plots for sale for most Kenyans.
Lanet
Lanet is in Subukia County. The town is off Nakuru Nairobi highway. It is home to Moi Forces Academy lanet, Lanet barracks, and Lanet Airport among other notable institutions. Over the last couple of years, the town has seen a rise in demand for plots for sale in Nakuru lanet. This is due to proximity to the highway and increasing residential settlement in the area.
Other satellite towns in Nakuru include:
- Free Area
- Shabaab
- Menengai
- Kiti
- Whitehouse
- Racecourse
- Langa Langa
- London
- Satellite
- Bahati
- Kaptembwa
- Bondeni
- Mbaruk
- Mwariki
- Pipeline
- Barnabas
- Freehold
- Milimani
- Naka
- Kiamunyi, etc.
The increase in population around the city is causing satellite towns to grow and keep affecting the real estate market. The towns also expand leading to more demand for real estate products.
g) Appreciation of prices of land
Last but not least, Nakuru City enjoys an average appreciation of land prices of 12.7 percent. This is according to County Land Prices which analyses prices of land across the country.
This means that speculative land buyers in Nakuru enjoy 12.7 percent per year without developing the vacant land. This is influenced by all the above factors.
Frequently Asked Questions About Nakuru City
Is Nakuru a city or a town?
Nakuru is already a city after its elevation to become the fourth city in Kenya. It became a city in December 2021
Which tribe is found in Nakuru?
Nakuru is a cosmopolitan city. However, the Kikuyu and the Kalenjin are the dominant communities in Nakuru, making up about 70% of the county’s population.
What language is spoken in Nakuru?
Nakuru being a cosmopolitan city, people speak English and Kiswahili
What is the meaning of Nakuru?
Nakuru was given the name Nakurro by Maasai community. This is in reference to the characteristically barren scrublands around the Lake Nakuru basin.
Over time it has grown to become an agricultural and commercial center
Which county is Nakuru town?
Nakuru town, now city is found in Nakuru County
Which is the largest county in Kenya?
Turkana County is the largest county in Kenya while Mombasa county is the smallest county in Kenya by size.
Is Nakuru good for business?
Yes indeed. Surprisingly, Nakuru City is one of the best destinations for doing business for Micro Small Enterprises(MSEs) by the Kenya Manufacturers Association
Is Nakuru a good place to live?
Nakuru City is one of the best places to live, with good weather, no snarling traffic jams and the wildlife attractive sites such as Lake Nakuru, KWS, Menengai Crater among others
How much is Nakuru to Nairobi?
The fastest way to get from Nakuru to Nairobi is to drive which costs $14 – $21 and takes 2h 20m. However, using public means will cost between $5 – $7 one way and takes 3 hours on average
How far is Mutaita from Nakuru town?
Mutaita is a short form for Elemenatita located off Nakuru – Nairobi highway. It is 25-minute drive from Nakuru CBD
How do I pay land rates in Nakuru?
Payments of land rates in Nakuru is easy and convenient
- Register and send the word ‘lands’ to the number 21504.
- After registration, dial *512# to access the service.
- Register your land with Title number, Full names, I.D number, contacts and Land Rent amount (as it appears on title).
- Track your application; enter your application number as sent to you upon booking your documents at Ardhi House.
- Pay land Rent, enter your land reference (LR) number, enter your I.D number and confirm your details. You will receive an SMS with payment options.
In conclusion, before investing in real estate properties in Nakuru city, always analyze the specific area well. This will ensure you reap maximum benefits as an investor.