Nairobi housing market enters self-correction phase

nairobi homesThese are good times for Nairobi ‘s middle and high-end tenants. For many landlords, not so much.

Despite registering enormous growth in the past few years, rents for the city’s middle-upper and high-end properties have begun to slow down amid fears of a sharp price correction.

Landlords in areas such as Kilimani and Kileleshwa, representative of upper-middle property areas, have seen their rental incomes – usually in the range of Sh100,000 to Sh120,000 – sliding by between 15 per cent and 17 per cent over the past 12 months.

On the other hand, landlords in areas such as Muthaiga, Rosslyn, Runda and Gigiri, representative of the high-end market, have seen their monthly rental incomes – usually in the range of Sh300,000 to Sh350,000 – dropping by between 8 per cent and 10 per cent.

Knight Frank (Kenya) chief executive Ben Woodhams says several factors are driving the decline but he expects a pick-up over the coming quarters.

“Some of them [clients] are taking a bit longer to sign because of the security situation but we see this as a temporary situation,” Mr Woodhams.

Insecurity has seen the US and Britain scaling down their local operations. This is likely to have a negative impact on the Nairobi high-end property market since diplomatic missions form a sizeable pool of tenants.

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