The departure of expatriates, including diplomats and Non-Governmental Organisations (NGOs) employees from Nairobi is dampening house prices and rents in the capital’s high-end market, realtor HassConsult said Tuesday.
“The flight of international residents is now being felt. There has been a steady downgrading of diplomatic and donor-funded postings since the world financial crisis of 2008, with many western governments running austerity programmes,” Hass Consult head of development, consulting and research Sakina Hassanali said at the release of quarter one residential price and land price indices.
“Economic growth and consumer demand have also affected tax revenue growth and donor funding during the decade-long ‘great recession’ that has followed.”
Ms Hassanali noted the steady attrition in the expat numbers accelerated last year in the new government drive curbing work permits.
“This triggered a new uptick in international departures, which by the first quarter of 2019 had resulted in significant falls in the sale prices and rents of top-end detached houses, which dropped by 4.4 per cent and four per cent respectively in the first 12 weeks of the year,” she said.
Kenya property developers have for decades skewed their developments towards the high-end property segment where the returns have been elevated. The market has been sweetened by new moneyed classes of entrepreneurs and State operatives who have been snapping up the properties.
“The nature and make-up of the market… certainly includes the expanding Kenyan elite: CEOs, top politicians, from governors to cabinet secretaries, private secretaries and company directors. But the other principal strand of this market has been internationals, with Nairobi positioned as one of the four ‘poles’ of Africa, as a centre of diplomatic and commercial activity,” noted Ms Hassanali.