Estate Laws Pushing Wealthy Kenyans From Apartments to Buy Houses for Over Ksh 80M

Wealthy Kenyans have been locked out from owning apartments given various building laws in posh estates in Nairobi.

According to HassConsult Quarter Four report, it was noted that most Kenyans in leafy suburbs owned houses instead of apartments due to existing regulations.

For instance, some of the areas limit the number of houses that can be built on an acre of land.

Other estates also have restrictions on the number of floors a storey building can have given that affluent Kenyans have a preference for their privacy when selecting where to stay.

A block of apartments in Nairobi, Kenya.

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The affected estates were Spring Valley, Loresho, Ridgeways, Runda and Karen where houses were estimated to cost an average of Ksh80 million

Other estates were Nyari, Kitisuru, Muthaiga and Gigiri.

“City planning only permits the building of one or two houses per acre in a majority of the city's townhouse suburbs.

"This leaves an enormous part of the city locked away for only a small fraction of its residents who can afford homes of an average price of 80 million Kenya Shillings," Head of Development Consulting and Research at HassConsult, Sakina Hassanali stated.

Consequently, given the demand that had been created by the regulations, the move saw house prices soar by 40 per cent in the last 10 years.

"House pricing in these areas has benefitted from house price appreciation due to strained supply caused by planning laws. 

"While apartment prices have increased by 22 per cent on average in the last decade, houses have soared 40 per cent in the same time period – almost twice as much," read the report in part.

For example, house prices in Karen grew 1.59-fold in the last 10 years while those in Muthaiga grew 2.21-fold.

These estate regulations have also seen investors clash with estate management who have occasionally moved to court to pause the construction of storey buildings.

Case in point, the Karen Langata District Association (KLDA) moved to court to stop the construction of a Ksh3 billion storey building for the Parliamentary Service Commission (PSC).

Apart from privacy and prestige concerns, many homeowners in the areas also fear that such investments can lower the prices in that area which can even go for Ksh200 million for an acre of land.

Aerial view of Karen Estate in Nairobi.

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