Rent In Nairobi Dropped By 1.2%, But Tenants Say No

Has rent dropped in your area of residence? As the year kicked off, did you receive any communication from your landlord/caretaker telling you the good news that your rent had dropped? Not at all. Maybe for new tenants. But not for you.

According to HassConsult, average rent in Nairobi and satellite towns dipped by the biggest margin in five years in the wake of reduced demand for luxury homes. But most tenants say that most tenants increased their rent at the start of the new year.

Stats from HassConsult indicate that the average rent for residential space shrank by 1.2 percent in the year to March compared to a growth of 2.4 percent in a similar period last year. The fall is the steepest since 2018 when rents dropped 2.5 percent in an electioneering period, with investors fretting over the outcome of the polls.

Related Content: Finding The Right Real Estate Company To Help You Buy Or Sell in Kenya

At the same time, demand for costly homes in satellite towns also dropped and pulled down rents, but workers leasing homes opted for cheaper apartments in the suburbs surrounding Nairobi such as Rongai, Syokimau, and Ruaka.

Semi-detached houses reported the biggest shrinkage in prices, dipping 3.2 percent followed by detached homes that fell 2.5 percent in the year to March.

Apartments in the satellite towns bucked the trend to record a 3.2 percent increase in the period under review on the back of increased demand for smaller units in the outskirts of the city.

Related Content: Which Opportunities Exist For Foreign Investment In Kenyan Real Estate?

The share of apartments in the wider Nairobi property market has increased to 64 percent while that of detached houses has plunged from over 50 percent in the early 2000s and 28 percent in 2016 to 7.5 percent in March. Semi-detached houses account for 28.1 percent of the market.

“Nearly all towns posted growth on apartment rental pricing, highlighting the increasing occupancy rate of apartments targeting renters with a monthly budget between Sh25,500 and Sh50,000,” added the HassConsult.

Related Content: Why Are Money Market Funds Performing Better Than Equities And Real Estate?