Nairobi's Property Market Soars Amidst Shilling Depreciation

A recent report by Hass Consult has revealed that landlords in Kenya, particularly in Nairobi, were able to make significant profits from property sales and rent, despite the weakening of the Shilling.

The report, spanning the fourth quarter of 2023, discloses that all suburbs experienced increased returns on house purchases, even amid a backdrop of 7.7% average inflation throughout the year. This inflationary pressure led to constrained consumer spending, a consequence of the elevated cost of living. Compounding the challenge, the weakened Shilling, currently valued at Sh160 against the dollar, escalated input costs for developers, consequently impacting property prices in sought-after neighbourhoods.

However, showcasing remarkable resilience, the property market yielded a commendable total return of 8.3% in the final quarter. This robust performance, coupled with elevated interest rates, sparked foreign investor interest triggered by the market's allure amidst the weakened currency. The report indicates that estates like Ongata Rongai, Athi River, Kitengela, and Loresho outperformed expectations, with Ongata Rongai taking the lead at an impressive 15.4% return.

Shunguli Duncan of Rock Field Properties sheds light on a notable shift in upscale areas like Karen, Runda, and Lavington. Increasingly, landlords in these areas are opting for rent payments in US dollars. Duncan attributes this trend to a rising number of expatriate landlords who prefer the stability of the US dollar amidst the fluctuating nature of the Kenyan Shilling.