Luxury houses in Nairobi posted a 3.5 percent jump in price in the first quarter compared to a similar quarter last year amid a recovery in demand of the property market following a slowdown due to pandemic economic hardships.
The Prime Global Cities Index by Knight Frank also shows that the city recorded a 2.4 percent rise in prices over a six-month period between the third quarter of 2021 and the first quarter.
The index ranks the performance of luxury residential prices across 45 global cities, tracking nominal prices in local currency.
Nairobi ranked 32 from 33 over the first quarter. It was the only city in Africa that made the top 45 global cities that posted growth in the last year.
The growth has been attributed to renewed demand and return of expatriates increasing buying after eased measures and resumption of international travel, which has boosted business activities and hiring in some sectors.
“This growth can be attributed to pent-up demand. After two years of the pandemic, as we entered the fourth quarter of 2021 there was a sense of normalcy returning. I believe buyers’ sentiments to get on with life motivated their purchasing resumption plans.
"Also with the pandemic seemingly behind us we witnessed many expatriates returning to Kenya,” said Tarquin Gross, head of residential agency at Knight Frank Kenya.
The report indicates a slowdown in the price growth of prime properties globally for the first time since the start of the pandemic, although on average prime cities continue to register nine percent in annual growth.
The growth over the quarter comes after a continued rise in the prices of all properties. Data by realtor Hass Consult showed prices of all properties - detached houses and semi-detached houses increased by 11.8 percent and 0.8 percent respectively in the 12-month period to March 2022.
The jump was attributed to the demand for detached houses amid a limited supply of the units. Large annual prices were recorded in houses located in Kitisuru, Langata, Loresho and Ridgeways, Kilimani, Westlands, and Spring Valley.
The Knight Frank’s index shows Dubai was the fastest rising prime price in the period studied with a 58.9 percent change recorded in the 12 months, and 23.2 percent change in six months from the third quarter of 2021 to the first quarter.
Real estate was among the worst-hit sectors by the economic fallout of the pandemic as orders by new house buyers dried up, largely due to income and job losses, cautious lending by banks, and investors choosing to keep their cash in hand as they rode out the economic uncertainty.