Apartment Prices Fall for Fourth Straight Quarter in Kenya

Apartment prices in Kenya fell three percent in the year to March, according to the Kenya National Bureau of Statistics (KNBS), extending a decline that has now run for four consecutive quarters.

The drop was sharper in Nairobi's high end estates, where apartment prices fell 4.8 percent. Middle income neighbourhoods in the capital recorded a smaller decline of 3.3 percent over the same period.

The softening prices follow years of intensified apartment construction that has left developers competing for a shrinking pool of buyers, with new supply consistently outpacing demand in several city suburbs.

Areas such as Kilimani, Kileleshwa and Parklands have shifted from largely single dweller housing to dense clusters of apartment blocks, a change driven by revisions to Nairobi's zoning laws in recent years.

Some resident associations in these suburbs have pushed back against the pace of development, arguing that roads, sewer lines and water supply infrastructure have not kept up with the added population.

Developers in the affected suburbs have responded by shifting focus toward clearing existing inventory rather than launching new projects, with industry data showing a growing stock of unsold apartment units.

Some developers have also begun offering discounts, flexible payment plans and rental guarantees in an effort to move stalled inventory, reflecting the pressure building up in the oversupplied segment.

The falling apartment prices have had one notable side effect. Data from the Central Bank of Kenya (CBK) shows the average mortgage size fell to nine million shillings in 2024, down from 9.4 million shillings the year before, the first such decline in seven years.

The number of active mortgage accounts still rose during the period, climbing by 756 to reach 30,016, suggesting that cheaper apartments have drawn in some first time buyers even as overall sentiment cooled.

The picture outside Nairobi looks different. Apartment prices in other parts of the country rose 7.5 percent over the same twelve months, meaning the correction is largely concentrated in the capital.

Standalone houses, including maisonettes, bungalows and villas, gained 8.5 percent nationally in the year to March, continuing a pattern in which detached homes have outperformed apartments for several quarters running.

A KNBS survey of tenants aspiring to own homes found that 63.1 percent would choose a bungalow if given the option to build or buy, while 23 percent preferred a maisonette and only 9.5 percent chose an apartment.

HassConsult chief executive and creative director Sakina Hassanali said standalone development remains limited because such projects demand large tracts of land and heavy capital investment. "There is demand but low supply is driving the prices," she said.

The wider numbers suggest a market splitting along income lines. Overall residential prices rose 4.8 percent in the year to March, driven almost entirely by standalone homes rather than apartments.