Market News

Nairobi building approvals touch nine-month high

building

People Working on a Building Construction in Eastleigh, Nairobi on April 3, 2019. PHOTO | EVANS HABIL | NMG

The value of building approvals in Nairobi rose to nine-month high of Sh14.9 billion in September 2021, after investors resumed construction of new projects that were frozen due to the economic uncertainty from the Covid-19 pandemic.

Official data from the Kenya National Bureau of Statistics (KNBS) shows that approval was highest since December last year when registrations stood at Sh19.3 billion.

The real estate sector has been on the rebound in line with the general economy after the government lifted the tough coronavirus lockdown measures—with the economy expanding by 10.1 percent in the second quarter of this year.

This rebound has given house buyers the confidence to invest in real estate, while developers are also able to move ahead with projects due to the prospect of a revival of the rental market.

Residential building approvals stood at Sh9.6 billion in September, ahead of non-residential buildings at Sh5.4 billion.

This is still lower than the highs of Sh24.8 billion and Sh6.7 billion recorded respectively in February 2020, the last month before Covid-19 hit the country.

A recovering construction sector also helped push up demand for cement, with consumption going up by 1.4 million tonnes to 6.7 million tonnes in the nine months to September 2021.

Realtors have also reported some recovery in house and land prices this year, which means developers are seeing higher demand and therefore reviving projects that had been put on ice previously.

Data from realtor HassConsult shows that land prices in Nairobi’s satellite towns increased at the fastest pace in more than two years as of September, led by Kiambu, Syokimau, and Kiserian which are among the most vibrant areas for new construction.

At the same time, house prices especially in the higher end estates rose at the fastest pace in three years, underpinned by renewed appetite and ability to purchase property.

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