NAIROBI, Kenya – Kenya’s real estate market continues to thrive, demonstrating a solid growth trajectory as both local and foreign investors show increased interest in the country’s property sector.
In the third quarter of 2024, the sector’s contribution to the nation’s GDP rose by 5.5%, reaching Sh283.8 billion, up from Sh268.9 billion in the same period in 2023.
This growth is largely attributed to an uptick in property transactions and ongoing development activities, which remain strong despite global economic challenges.
The continued development of Kenya’s real estate sector is being driven by an increasing demand for both residential and commercial properties, particularly from foreign investors and the Kenyan diaspora.
The sector has seen a notable surge in property prices, with a 5.2% increase recorded in Nairobi and surrounding areas in 2024, up from 2.5% in 2023, according to a report from HassConsult.
This rise was particularly driven by a 7.5% increase in the price of standalone houses, while apartments saw a modest 1.6% price hike.
This strong market performance stands out in a global context where many real estate markets are grappling with inflation, rising interest rates, and economic uncertainty.
As global investors seek stable and affordable alternatives offering high returns, Kenya has positioned itself as an attractive destination.
Its combination of competitive property prices, high rental yields, and a favorable investment climate make it a standout choice for investors looking to diversify their portfolios.
A Hub for Foreign and Diaspora Investment
Nairobi, in particular, offers significant advantages over other global real estate markets.
A survey by Proxima Real Estate and Roots Africa shows that Nairobi offers competitive property prices and exceptional rental yields compared to major global cities.
High-end properties in neighborhoods like Kilimani are priced between Sh130,000 and Sh140,000 per square meter, meaning a 200-square-meter apartment could cost between Sh26 million and Sh28 million—far more affordable than prime residential areas in cities like London or New York, where similar properties often exceed Sh100 million.
In addition to affordability, Nairobi’s rental yields are among the highest globally, averaging between 7% and 9%.
In comparison, cities like London and New York typically see much lower yields of 3% to 5%.
The lower cost of living in Nairobi compared to cities such as Johannesburg and Dubai further strengthens the city’s appeal to investors seeking lucrative opportunities.
Targeting the Diaspora Market
Developers and real estate agents are actively targeting non-resident Kenyans and foreign buyers, using a variety of marketing strategies tailored to the diaspora market.
Virtual property tours, digital platforms, and online investment forums are becoming essential tools in attracting international investors.
The Kenyan government and real estate agencies are also holding property expos in major markets such as the United States, the United Kingdom, and the Middle East to promote Kenyan properties abroad.
Real estate developers are increasingly offering flexible payment plans and mortgage solutions to make properties more accessible to overseas buyers.
Additionally, rental guarantees are being used to entice foreign investors, particularly in high-end luxury developments and gated communities.
These properties, which often feature modern designs, smart home technology, and premium amenities, are gaining traction among high-net-worth diaspora investors and foreign nationals.
Expanding Luxury and Vacation Home Market
Luxury housing in areas such as Karen in Nairobi, Runda in Kiambu, and beachfront properties in Kilifi, as well as scenic locations in Nanyuki, are seeing growing interest from investors seeking vacation homes, rental properties, and retirement residences.
With Kenya’s real estate sector evolving, there is a clear shift towards catering to affluent buyers looking for high-end, well-designed estates that offer both comfort and security.
The surge in investment interest has not gone unnoticed, with realtors and developers now making direct trips abroad to meet potential buyers and promote Kenya’s real estate opportunities.
Through these engagements, developers are building trust with international investors, which is crucial in alleviating any doubts about the security and reliability of investing in Kenyan property.
