Nairobi — Detached house prices in Nairobi's suburb areas grew the fastest in Q2 of this year, buoyed by low supply.

Latest House Price Index from HassConsult, a realtor, shows that detached house prices in Muthaiga, Karen, Runda, and Lavington in Q2 grew by 3.5 percent, 2.5 percent, 2.2 percent, and 2 percent, respectively.

"Detached house prices grew at their fastest quarterly pace in nine years, which also reflected in suburbs such as Muthaiga, Karen and Runda--that are largely exclusive of apartments-- reporting faster property price growth," HassConsult Co-CEO & Creative Director Ms. Sakina Hassanali said.

"There is a general lack of supply of detached houses leading to the increased prices."

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While detached homes, which are made up of townhouses and villas, expanded by 5 percent, semi-detached units and apartments grew at 1.3 and 1.1 percent, respectively, in the quarter.

"As an investment option, the improved annual price growth of 7.8 percent for all property (and 10.9 percent for detached houses) improved the competitiveness of property against other asset classes such as government Treasury bills, whose interest rates have now fallen to the 8.1 to 9.7 percent level from 16 percent a year ago."

Tough economic challenges impacted the rental market, with prices contracting by 0.2 percent in Q2 compared to an increase of 0.3 percent in the preceding quarter.

"Landlords are therefore increasingly forced to forego an increase in rent prices in order to protect occupancy in a price sensitive market," added Ms. Hassanali.

While houses in Tigoni, Ruiru, Kiserian, Kiambu, Langata, Ongata Rongai, Gigiri, and Ridgeways expanded, apartments in Upperhill, Kileleshwa, and Westlands lagged, declining by between 2 and 4.6 percent.