Kenya lost its top position in Africa in terms of the rise in high-end real estate prices as demand slowed in 2014, shows a new report by property management firm Knight Frank.
The prices of luxury homes purchased by the super-rich rose by only 1.4 per cent last year compared to 4.9 per cent a year earlier — underlining high supply in the market.
The price stagnation in Nairobi saw Kenya lose its top position in Africa to rank fourth behind Cape Town, Johannesburg and Marrakesh. The average rise in the property price for Kenya was below the global average of two per cent.
Around the world, however, Nairobi was ranked 55 from a list of 100 cities surveyed by the real estate agent company.
“The value of luxury residential property around the world rose by just over two per cent on average in 2014, based on the performance of the 100 locations covered by our Prime International Residential Index (PIRI) ranking,” reads part of the Wealth Report published by Knight Frank.
Knight Frank describes prime property as normally the most expensive property in an area and where demand has a significant international bias. When contacted, management of Knight Frank said they plan to launch the report locally this week Thursday when they will give insight to the findings.
Security concerns, which lead to a drop in tourism numbers, are suspected to have impacted the country’s attractiveness.
According to Knight Frank’s report on unique sales in Africa, some of the luxury houses that were up for sale last year in Kenya included Amina Ocean Villa in Watamu, valued at Sh304 million, and the Casa Toni in Shanzu priced at Sh200 million.
A survey by another real estate firm Hass Consult showed that property prices in Lower Kabete, which was the most expensive area in 2013, shrunk by 4.3 per cent in 2014 to an average Sh76 million for a three- or four-bedroomed house from Sh79.5 million the previous year. Other prime areas that recorded property price falls included Lavington, down 5.6 per cent and Ridgeways which shed 1.2 per cent.
On the gaining side was Nyari Estate, up 9.5 per cent to become the most expensive area with property prices averaging Sh80 million. Other gainers included Kitisuru up 9.5 per cent and Runda, 11.1 per cent. Some real estate dealers however differed with the findings, citing increased activity from international investors in the second half of last year.
“It should have gone up because after the president’s acquittal at the ICC there was more interest from countries such as China,” said William Kabue, managing director at Certiorari Real Estate.
The Knight Frank wealth report, however, notes that Nairobi should see the opening of around 1.8 million square feet of first-world shopping malls, with new international retailers committing to the region for the first time.
“This is largely being driven by a burgeoning middle class hungry for Western-style goods and shopping experiences that, by and large, seem impervious to political controversies and terrorism activities,” said Knight Frank.
Some of retail space expected to be completed this year include Garden City set to be opened in May and Two Rivers due for completion in September.