Nairobi luxury homes recorded an impressive price growth of 2.5 per cent in 2023, beating the growth rate of popular markets such as London and New York.
In the 2024 Wealth Report by real estate company Knight Frank, which was released on Wednesday, March 6, Nairobi was ranked at position 52 in terms of growth rate.
Notably, the Prime International Residential Index (PIRI) recorded that the prices of similar homes in London and New York dropped by 2.1 and 2.0 per cent respectively.
"Now in its 17th year, the Knight Frank Prime International Residential Index tracks movements in luxury prices across the world’s top residential markets.
"The index, compiled using data from our research teams around the world, covers major financial centres, gateway cities and second-home hotspots – both coastal and rural – as well as leading luxury ski resorts," Knight Frank explained its ranking.
Meanwhile Manila (Philippines) and Dubai recorded the highest growth in prices at 26.3 and 15.9 per cent respectively.
The recent price growth in the Kenyan market is a testament to the resilience of the market and an indication of demand for Nairobi among the super-rich across the world.
Notably, the Knight Frank Wealth Report highlights investments among individuals whose net worth is above Ksh143 million.
"Yet at the start of 2023, economists were expecting a much weaker outcome. Stock markets were headed for more pain, inflation was veering out of control and the pandemic-fuelled property boom was set to end in tears as borrowing costs hit 15-year highs in some markets. Right? Wrong," read the report in Part.
London and New York: The Election Factor
The recent decline in the London and New York markets was attributed to government policies and anticipated elections. The US is expected to hold its election in November 2024 while the UK General Elections are set to be held in January 2025.
"A Labour Party victory in the UK general election is expected to end the non-dom tax regime, increase stamp duty for overseas buyers and potentially lead to changes to inheritance tax rules," the report explained.
However, it noted that the decline in prices could be attractive to tycoons seeking to buy homes.
Billionaire Interest
As highlighted in the report, tycoons' interest in 2024 will be influenced by the relaxation of taxation and regulations on property.
Property appeal will also be a factor that the billionaires will use to determine where to buy their next luxury homes.
"Auckland leads our prime price forecast, while Sydney is the frontrunner in our rental forecast for 2024. Prime price growth across
the 25 cities tracked is forecast to reach 2.5%, up from 1.7% in 2023 with Mumbai, Dubai, Madrid and Sydney joining Auckland to complete the top five," read the report in part.
