Written by Eng. Macharia

Real estate can seem like a mystery to those who don’t understand what drives its growth. In economics, rent is considered the return for the use of land, which is one of the fundamental factors of production.

But what about a dormant piece of land in a suburban area? How does its value suddenly skyrocket? Today, it may be worth less than half a million Kshs, but in two years, it could be selling for three times that amount. Recently, I attended a real estate conference in Nairobi featuring industry experts, and one major topic stood out: What truly drives property value?

While many factors influence land appreciation, here are five key elements that determine how much your property will be worth in the coming years. If you’re an investor or aspiring homeowner, these are non-negotiable factors you must pay attention to. Let’s dive in.

1. Development

You’ve probably heard that development is a game-changer for most properties. Let’s consider an example:

“Do you know the government has started building a tech hub in Konza City?”

This is how property value skyrockets—through development. Whether it’s a government-backed project, private estates, or commercial infrastructure, development transforms a location from ‘rural’ to ‘prime land.’

Take Konza Technopolis as an example. Once considered a remote area, the government’s smart city initiative has attracted investors, tech firms, and infrastructure projects, significantly increasing land prices. Similarly, areas around Tatu City and Syokimau have witnessed a surge in value due to large-scale developments.

2. Currency and Inflation

Even when the Kenyan Shilling was more stable, land prices still appreciated. So, what happens when the shilling depreciates? Real estate becomes the safest way to store wealth.

Between 2020 and 2024, the Kenyan Shilling weakened against major currencies, but land in strategic locations appreciated significantly.

For example, if you had Kshs 1 million in savings in 2020, its purchasing power today would be much lower due to inflation. However, if you had invested that amount in land in places like Juja or Kitengela, your property value would have grown exponentially.

3. Time

They say time heals all wounds, but in real estate, time is the wealth builder. The future is always cheaper today than it will be tomorrow. Looking back 10 years, land in Ruaka was selling for as low as Kshs 500,000 per acre. Fast forward to today, and the same piece of land is valued at over Kshs 20 million.

Why? Time. The earth isn’t expanding, but the population is growing. More people need land, yet the supply remains limited. The longer you wait, the more expensive it becomes.

4. Infrastructure Development

One of the biggest drivers of property value in Kenya is infrastructure development. New roads, highways, and rail networks make previously inaccessible areas more attractive for development.

For instance, the construction of the Nairobi Expressway has drastically improved property values along Mlolongo, Syokimau, and Westlands. Similarly, the Standard Gauge Railway (SGR) made areas like Mombasa Road and Athi River more accessible, boosting land prices.

5. Demand and Population Growth

Kenya’s urban population is rapidly increasing, fueling demand for housing and commercial spaces. Cities like Nairobi, Mombasa, and Kisumu continue to attract a rising number of people seeking employment and business opportunities.

High demand in places like Ruiru, Thika, Kitengela and Ngong has led to land price surges, making them prime areas for investment.

Final Thoughts

Real estate is one of the few investments where patience rewards you. If you’re considering buying a property in Nairobi, Mombasa, or any strategic location, you must pay attention to these driving factors to make an informed investment.

In the coming decades, development, currency stability, time, infrastructure, and population growth will continue shaping real estate value in Kenya. They may affect your property differently, but they all work together to increase your return on investment.

Also Read// How to verify the authenticity of your Title Deed in Kenya?

Have you witnessed a real estate boom in a particular location? Share your thoughts in the comment section!