Markets & Finance

Bulk of Nairobi middle income families rent houses


The construction of a new residential apartment with a survey saying most residents in Nairobi are tenants. PHOTO | NMG

More than 85 per cent of middle-income families in Nairobi live in rented houses, pointing to the financial challenges of buying and building their own units.

A survey by real estate and investment firm JLL Africa shows that 439,051 households out of 513,755 lived in rented units by the end of last year.

The high number highlights the financial difficulties facing middle-income Kenyans in a bid to buy land and build homes or purchase completed units.

“A few own their current residence, either through purchase, own construction or inheritance,” JLL Africa says in the report.

Home prices in the capital increased at the fastest pace in 11 years on the back of renewed demand from buyers and a spike in the cost of construction materials like cement and steel, further pushing the units out of reach.

The average price of a house within Nairobi rose 10.5 per cent in the year ended June compared to a drop of 1.7 per cent in a similar period a year earlier.

The rise marked the fastest increase since 2011 when the growth stood at 15.7 per cent, reflecting the impact of the demand recovery and spike in the cost of building materials.

There has also been a rise in demand for houses in Nairobi’s satellite towns mainly due to improved infrastructure within the city and amenities such as hospitals and schools, allowing more people to settle further from the city.

Nairobi East region, home to estates like Embakasi and Buruburu, has the highest percentage of households living in rented units at 94.8 per cent or 104,924 families followed by Nairobi South at 91 per cent or 94,350 households.

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Nairobi West which has estates like Lang’ata and Madaraka has the lowest percentage of households living in rented units at 66.7 per cent or 75,226 families.

The report further shows that out of the 439,051 households in the rented spaces, only 47 per cent or 218,209 can afford the monthly rent of between Sh20,000 to Sh50,000, highlighting the mismatch in the growth rates of incomes and the increase in rent prices.

While the number of middle-income households in the capital rose to 513,755 last year –marking a 10.5 per cent jump from 464,723 in 2019— the majority of the families are grappling with the high cost of living that has made it difficult to purchase their own houses.

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The survey that sampled households across the five regions of the city— Nairobi North, West, East, Central and South— shows that less than half of the households in each of the zones can afford the Sh20,000 to Sh50,000 monthly rent.

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