Why Is There a Surge in Luxury Real Estate Developments in Kenya?

The number of high-net-worth individuals in Kenya increased from 4,900 to 9,400 between 2006 and 2016. The number is expected to rise to 16,900 by 2026.
In September 2022, Nairobi’s luxury real estate market recorded a 2.9% price growth compared to September 2021. And a 4.1% increase as of September 2023.
As of 2023, Nairobi currently ranks 9^th out of 45 cities in Knight Frank’s Prime Global Cities Index, which tracks the changes in luxury residential prices.

As of 2023, Nairobi is ranked as the 4^th wealthiest city in Africa.

It has also experienced a 2.9% luxury property price increase between September 2021 and September 2022. And a further 4.1% in the 12 months leading to September 2023.

Which raised its ranking on the Global Luxury Property Index above major cities such as London, Paris, Tokyo, Hong Kong, and Beijing.

According to Kunaal Samani, the MD at Pam Golding Properties Kenya, there has been an increase in sales of high-value residential properties since 2020. This is largely because the real estate market experienced a price correction that saw buyers seeking to capitalize on the opportunity.

However, this is not the only factor behind the recent increase in the demand for luxury housing in Kenya.

Table of Contents

What Factors Are Driving the Recent Surge in Luxury Real Estate Projects?

Chief among the reasons driving the luxury property market growth is the influx of illicit cash from former government workers and politicians. However, the increase in the expatriate population and the rising number of wealthy individuals have also played a key role in the high-end real estate boom.

Affluent Population Growth

Kenya has experienced an increase in dollar millionaires in recent years. As such, more Kenyans can buy luxury properties, leading to a surge in premium property constructions. Shaif Sharif, Head of sales at Pam Golding Properties Kenya, said, “Supply is always low in this market sector, so there is strong demand for high-end properties.”

Growing Expatriate Numbers

The influx of foreign companies in Kenya has led to an increased expatriate population in Kenya. Additionally, there has been an increased migration of African Americans, black Britons, and other diaspora Africans to Kenya, which has led to an increased demand for higher-end homes in Nairobi.

Illicit Funds

Corruption in Kenya has been at an all-time high since 2013. The number of individuals who have become dollar millionaires while working for the government is astonishing. This has, in turn, led to an increased purchasing power by a large number of retired civil servants and politicians. It is leading to an increase in the demand for luxury housing.

Are There Urban Development Initiatives or Infrastructure Improvements Stimulating Luxury Property Construction?

Coincidentally, the key areas in Nairobi that have experienced substantial luxury real estate development have also experienced major infrastructural development. These include Nairobi’s Upper Hill, Kilimani, Lavington, Westlands, Parklands, Kileleshwa, and Kitusuru.

The development of better roads, new malls with luxury brand shops, and a budding entertainment scene and nightlife has played a key role in the surge in premium property constructions in these areas.

What Features Define the Surge in Modern Luxury Real Estate Developments?

The increased demand for luxurious interiors in Kenya has led to the revolution of the upscale property development trends. This client tier tends to shop for what they want, as money is no objection.

Clients willing to fork upwards of Ksh 50 million are looking for properties with more modern features such as a spacious pantry, separate entertainment room, expansive balconies or patios, heated pools, wine cellars, Jacuzzis, movie theater, smart home systems, and mature manicured gardens.