In the aftermath of the COVID-19 pandemic, a noticeable change has been observed in the real estate landscape of Nairobi, as affluent Kenyans are increasingly moving away from the city center in favour of suburban properties.
This shift is not limited to the wealthy; even middle and low-income individuals are seeking more affordable housing options due to the soaring inflation rates in the country, which have caused rent prices to increase by 5% since the pandemic.
A report by Knight Frank for the year 2022-2023 highlights this trend. People are now migrating from city centres to invest in suburban real estate, primarily driven by factors such as affordability, picturesque scenery, and favorable weather conditions.
Areas such as Nanyuki, Nyali, Lamu, and Diani have garnered considerable interest from the affluent.
Similarly, several locales within Nairobi, including Karen, Rosslyn, Muthaiga, Runda, parts of Kileleshwa, and Kiambu (Tigoni), are experiencing an uptick in real estate transactions.
According to Knight Frank's report, "With inflation continuing to edge upwards, affordability is expected to come into even sharper focus, especially as real household incomes continue to be eroded.”
Surprisingly, the majority of prime real estate buyers consist of Italians, closely followed by Dutch super-rich individuals, Belgians, New Zealanders, Americans, and French nationals seeking second or even third homes.
Mombasa's allure lies in its coastline, tropical climate, and potential as a vacation destination for their families.
In that same vein, Naivasha has emerged as a hotspot for those interested in purchasing vacation or holiday homes, with prices often exceeding Ksh15 million.
The suburbs of Nairobi are also enticing due to the availability of more extensive indoor and outdoor spaces compared to city residences.
The congestion associated with city life is a primary driving factor for this shift. The affluent now prefer properties with beachfront views, lush greenery, and serene surroundings over city skyscrapers and the urban hustle and bustle.
However, Noorah Wanjiru Abdalla, a prominent real estate expert, notes that wealthy clients often invest in apartment units near the Central Business District (CBD) as an asset for their children's future.
These apartments, located in areas like Parklands, Westlands, Kilimani, and along Muranga Road near Pangani, offer a more affordable investment option, ranging from Ksh2.5 million to Ksh30 million based on size, design, location, and proximity to the CBD.
Regarding the cost of suburban homes, Abdalla explains that prices vary widely based on location and property features.
For instance, in Karen, a luxurious 5-bedroom mansion with ample grounds and modern amenities can range from Ksh 100 million to Ksh 300 million.
In Runda, a 4-bedroom villa with a swimming pool and high-end finishes could cost between Ksh90 million to Ksh200 million.
She emphasizes that these prices fluctuate depending on property characteristics and market demand, reflecting the economic status of the country.
Finally, she posits that infrastructure development such as the expansion of roads and highways, Security and access to amenities like international schools and healthcare facilities often play a significant role in property selection.