According to the 2023 Wealth Report released on March 1, Nairobi luxury homes recorded a 3.8% increase in prices in 2022, ranking 59th in the Prime International Residential Index by real estate firm Knight Frank. The high-end properties tied with those in Beijing and almost outperformed Singapore by 0.1%. Major cities edged out by Nairobi were New York at 67, Berlin at 68, and London at 75.
Dubai recorded the largest growth in property prices at 44%, followed by Aspen in Colorado and Riyadh in Saudi Arabia at 27.6% and 25% respectively. The report attributed the growth in residential property prices to wealthy individuals still spending their money to purchase homes despite the state of the global economy.
Wealth preservation, safe-haven capital flight, and supply constraints played a part in the price growth, but the pandemic-induced surge had more impact. The pandemic highlighted the fragility of life and sparked a mass transition to hybrid working. Wealthy people increased their appetite to buy, with 17% telling Knight Frank that they added to their portfolios in 2022.
Moreover, Kenya was also among the most preferred destinations for property investments among wealthy Africans, ranking second after the United Kingdom.
Nairobi’s luxurious property performance improved compared to the 2022 report, where it ranked at 79. Homeowners are either selling or renting their property in dollars, driven by the Kenyan shilling’s depreciation against the US dollar. “There has been increased preference from investors to have rent in dollar payments due to the ongoing depreciation of the Kenyan shilling,” Knight Frank stated in its Kenya Market Update report.
