Infrastructure raises land prices in Kisumu outskirts

Infrastructure raises land prices in Kisumu outskirts

An aerial view of Kisumu town. Photo/PD/NOVEN OWITI

Article on People Daily by By Noven Owiti, Friday, July 23rd, 2021.

The port city is experiencing a property boom, stretching further into outlying areas, as a result causing an increase in land costs, and possible land scarcity in the near future.

Kisumu town has witnessed rapid real estate growth in recent years with notable developments comprising of residential apartments taking shape, mainly far-off the Central Business District (CBD).

This progressive development has led to developers searching for more land leading to widening of the urban boundaries, consequently increasing cost of land.

And with the ongoing urban rejuvenation of the downtown and lower town, which includes modernising the lake front and decongesting main streets, the industry players have hinted at a further increase in land prices.

Speaking to Boma, experts in the sector also predicted that scarcity of land could be in sight in the coming years, further pushing prices up.

Land prices doubled

Currently, land value in the middle and high-class Riat Hills residential area for an eighth of an acre is estimated at Sh2.5 million.

The same piece of land in the leafy Milimani surburbs goes for Sh20 million.

On the other hand, one-acre plot prices range between Sh7 million and Sh12 million in Riat.

In Milimani, an acre, which is however hard to come by is valued at between Sh80 million and Sh100 million, while an eighth costs between Sh10 million Sh12 million.

The price of an acre plot in Riat, 10 years ago went for between Sh1 million and Sh1.5 million, indicating that prices have gone up 10 fold.

Other areas experiencing growth are Mamboleo, where land price has slightly changed, with an eighth of acre selling at about Sh2.5 milion from between Sh1.5 million and Sh2 million previously.

Property growth in this area is being influenced by ongoing construction of Mamboleo-Miwani-Chemelil Road.

In the adjacent Kibos metropolitan area, the land value of an eighth of an acre goes for between Sh750,000 and Sh800,000 compared to Sh500,000 previously.

An acre plot is sold at between Sh3 million and Sh4 million. While in areas around Kibos farmlands the price of an acre piece of land ranges from Sh1 to Sh1.5 million.

Areas around Kisumu International Airport have also attracted notable growth recently leading to corresponding rise in land value. The area is also connected to Kisumu-Busia highway.

A quarter piece of land goes for about Sh2.5 million from between Sh1.5million and Sh2million years ago.

Nyamasaria-Mowlem area along Kisumu-Nairobi Highway is another growth node area.

A quarter acre plot was previously around Sh1.5 million, but it has doubled to Sh3 million.

Open up opportunities

The upward trend in land prices is expected to continue owing to scarcity and infrastructural development taking shape in most parts of the town.

Lake Estate Agency Limited director Nishma Karia says on-going implementation of government projects in the town, such as the refurbished Kisumu Port and rehabilitation of Kisumu-Nakuru metre-gauge railway, is also expected to inspire an increase in land costs, thus determining the cumulative value of property investment.

As a result, viable opportunities will open up for property investment, further influencing land prices.

“With the model of services being implemented in Kisumu, we see an opening on the property market.

People are looking to invest here, especially in housing projects, therefore, the land prices are expected to increase further,” said Karia.

The developer foresees areas around Milimani, Riat Hills, Mamboleo, Kibos, Maseno, Ojolla and Kisian as potential suburbs that could attract further growth hence accelerating land value.

Luke Madende, a land valuer and Roack Consult Limited co-director says lack of proper land tenure systems and physical planning is hurting development in the real estate sector in Kisumu.

He says the current problems need to be fixed to guide how new development projects will undertaken going foward.

“Problems of land supply are created by tenure, traditional trends in land use and plans for the future.

Until the entire Kisumu city is brought under proper physical development planning regime, the problems in land management will remain with us,” he says.

Madende says Kisumu town is characterised by the old municipality, which is dense, largely rundown and is going through urban renewal whereas extended areas are developing haphazardly. He cites the extended areas as most affected by planning challenges.

“The city is supposed to grow into these areas, which remain as ancestral enclaves.

Therefore, investors move in through private transactions, but the planning discordance will keep slowing momentum for growth,” he states.

The land valuer underscores the need for the county government to roll out a deliberate urbanisation programme that not only unpacks land for expansion, but also secures the ancestral interests in the affected development zones.

Unregulated broker problem

“For instance, families holding ancestral properties need advice on how to blend in with the unravelling urbanisation in terms of shifts in sources of livelihoods and environmental challenges,” he says.

The entrepreneurs cite unlicensed brokers activities and poor land administration as other factors influencing land value and the property market in Kisumu, a sentiment, which is backed by Karia, who blames brokers for the overpricing and faking land prices.

“These unregulated brokers seem not to follow the land guidelines of what market prices should be,” she said.

She urges developers to use licensed agencies to ensure credibility in their transactions.

“Prudent investors would be skeptical about putting up projects on pieces of land whose owners are embroiled in disputes.

They tend to look for transparency, integrity and professionalism in transactions,” Karia explained.

She claims there are instances of multiple land titles as a result of manipulation at the lands offices.

Madende also points out that activities of the middlemen operating as land dealers resulted in speculative tendencies in land transactions.

“The brokers dictate property prices without regard to the general sector trends, which is the genesis of the speculation,” he says.

He urges land buyers to deal with professional valuers and reputable agents to avoid being duped.

For better management, Karia recommends digitasation of land records to promote transparency and accountability in transactions.

This, she says, will increase the confidence in investors coming to put up projects in the town.

Additionally, she is calling for correct zoning of the town to determine land pricing.