How much would you pay for rent if you were working outside Kenya? Expatriates living in Nairobi spend about 20 per cent of their income on rent, utilities and security, yet Kenya remains expensive compared to African cities such as Johannesburg, Lagos and Cairo.
Housing in Nairobi is 39 per cent more expensive than Lagos, and 20 per more than Johannesburg, data from Expatisan, an online platform that compares the cost of living across cities in the world for expatriates shows.
Housing in Nairobi is eight per cent more expensive than in Dar es Salaam.
Ben Woodhams, the Knight Frank managing director says more mature African cities tend to have a higher supply of homes that would appeal to expatriates, which means lower rents.
“If you look at African cities, the less mature a city is, the more expensive its properties is, both to buy and to rent,” he says.
Mr Woodhams says apart from the low supply of good houses, Nairobi is a regional economic and financial hub for East Africa and the home to many international organisations, therefore there is a stronger demand for high-end property than most countries in the region.
However, if you thought life was expensive in Nairobi, try renting a tiny apartment measuring 85 square meters in New York or London.
In New York, you would pay an average of Sh380,000 for a small apartment in a prime location while in London it will cost you about Sh315,000.
Sylvia Bisieri who lives in North Carolina, USA says the cost of one bedroom used to be cheap two years ago.
‘‘But due to a lot of people moving here rent is now between $850-$1,500 (Sh87,550 to Sh154,500) for a one-bedroom but New York is even more expensive and someone can pay even $5,000 (Sh515,000) per month,’’ says the Kenyan who has lived in USA for about 10 years.
Studio apartments in USA range from $500 (Sh51,500) and are mostly used by students who share common areas such as the living room and kitchen.
Kenyans are among the buyers of properties in London and New York which attract higher rental income than locally.
“The continued rising demand for property has made property as an investment a more attractive route,” said Mr Woodhams.
Knight Frank’s Wealth report notes that 32 per cent of the ultra high net worth individuals will invest in real estate in prime locations such as New York City in the next two years.
The report further notes that digital disruption will shape investment patterns globally.
For example, Airbnb and other online booking sites such as OneFineStay have facilitated the growth of short-stay accommodation.
OneFineStay has not gained foothold in Kenya yet. It was launched in 2010 and offers luxury-homestay options. After successful expansion from London and New York into Paris and Los Angeles, the founders recently set their sights on Rome.
The appeal of the private-house stay is also gaining traction among business travellers.
One way that companies have become more conscious about cost is to increase their reliance on short-term assignment and use serviced apartments rather than hotel during the initial stages of relocations.
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Additional reporting by Mathias Ringa