Nairobi’s Prime Properties Prices at their Worst Fall in History

By Juma / Published June 6, 2019 | 5:53 am





The prices of prime properties in Nairobi dropped to their lowest in history, dispelling the notion that it is the most lucrative venture for the first time.

The report released by Knight Frank, the Knight Frank Prime Global Cities Index showed that the prices of prime residential areas within Kenya’s capital dropped by 6.5 percent in a period of 12 months to the month of March 2019.

For more than 10 years, the real estate sector, especially the prime residential, has been one of the most profitable investment options for Kenyan high-end earners.

The returns in the sector has forced many venturing into the business, leading to an oversupply with fewer buyers, hence the drop in asking prices.

The index by Knight Frank tracks a total of 45 cities around the world on the performance of their prime properties. Nairobi is among the worst performing, coming in at -6.5 percent.

Canada’s Vancouver is the worst performing city among the 45 tracked with the prices falling by 14.5 percent, followed by Istanbul with a drop of 9.9 percent then Turkey and Auckland Australia at – 7.5 percent.

In the new rank, Nairobi has dropped to the 42nd position out of the 45. South Africa’s Cape Town is the only African city ranked among the top 20, at position 19 with a slight drop of 2.1 percent.

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Other cities ranked as follows; Berlin (14 percent), Frankfurt (10 percent), Edinburgh (8 percent) and Paris (8 percent) are out in front. All four cities share three key attributes; strong tenant demand, limited new supply and relative affordability.

Moscow, at 12 percent has also risen up the rankings. Prime districts such as Ostozhenka in the Russian capital saw a number of high-end projects launch in 2018 pushing prime prices higher.

In Canada, the gap between Toronto at 3 percent and Vancouver’s performance at -15 percent continues to widen with almost 18 percentage points now separating the two cities. Whilst both operate a foreign buyer tax, Vancouver has seen a flurry of additional measures aimed at reducing speculation and curbing price inflation.

Miami leads the four US cities tracked by our index, its appeal boosted by the State and Local Tax (SALT) deduction ruling, which has sparked a rise in the number of US tax migrants heading to Florida given the absence of income tax and inheritance tax as well as favorable corporate tax rates.

New York (-5 percent) and London (-5.1 percent) are almost level pegging although London is arguably further ahead in its market cycle as new buyer registrations are starting to build.

From 1 July, New York will see the introduction of a new Mansion Tax, applicable to both residents and non-residents, the tax will be a graduated levy based on the purchase price.




About Juma

Juma is an enthusiastic journalist who believes that journalism has power to change the world either negatively or positively depending on how one uses it.(020) 528 0222 or Email: info@sokodirectory.com

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