Nairobi News


Uhuru’s plan to cut rents, home prices in Nairobi

The planned construction of 30,000 new homes in Nairobi could significantly cut rents in the city’s middle- and low-end estates as well as cause a massive price correction in mid-level housing market, realtors said.

Rents make a major expenditure item in the monthly budgets of Nairobi residents and a fall or stagnation would offer a welcome relief after many years of persistent escalation.

Kenya is set to launch a low-cost housing initiative that aims to build 30,000 houses in Nairobi’s Eastlands area, as part of President Uhuru Kenyatta’s ‘Big Four’ agenda to deliver affordable housing to the majority of the population. The city is currently estimated to have a housing deficit of 1.85 million units.

The low-cost housing project aims to put up 5,000 homes in Nairobi’s Shauri Moyo estate, 20,000 in Makongeni, 3,000 in Starehe and 2,000 in Park Road estate.


Construction of the Shauri Moyo, Makongeni and Starehe houses is expected to start within six months while ground breaking for the 2,000 units of affordable housing on Park Road is to begin in the next three months, State House spokesman Manoah Esipisu said last week.

Under the longer term housing plan, Mr Kenyatta’s government has pledged to offer private developers about 7,000 acres of public land.

HassConsult research and marketing manager Sakina Hassanali on Thursday said that the planned massive housing project will cause more efficient use of public land with the potential to significantly shift pricing.

“Land in Nairobi contributes a significant portion of the unit cost of a house and offering developers of affordable housing free land, makes real the likelihood of prices easing on the apartment market,” said Ms Hassanali.


Johnson Denge, a senior manager for regional markets at Cytonn Investments, said the 30,000 new units would lead to a price correction in the lower end of the housing market when completed.

“There are some markets that are charging unnecessarily higher. There will be a correction of rentals,” said Mr Denge while noting that six out of 10 Nairobi residents currently live in informal segments.

“These houses will dignify the dwellings of these people who live in the informal settlements yet are paying rentals that are for a dignified place.”

Mr Denge said the new supply over time would allow renters in the mid-level housing markets to strike some bargains with their landlords by softening demand.

It is estimated that about 500,000 citizens migrate from rural areas to Nairobi in search of jobs every year, putting strain on the city’s housing infrastructure.

The entire country requires 200,000 units every year, 80,000 of them for Nairobi alone.

Private developers have been able to deliver only 30,000 units, leaving a backlog of about 50,000 units. Real estate developer Daniel Ojijo said the state housing plan was welcome but added that completion of the initial 30,000 new housing units will in the initial stages have little impact.

“30,000 units is still a small number to bring rents come down,” said Mr Ojijo.


“The demand for housing is much higher. More units need to be brought to the market to alleviate current shortage and high rents.”

A report by HassConsult released Thursday showed that asking prices for properties in the city rose by 2.4 per cent and rents were marginally up (one per cent), reversing negative annual trends in the first quarter of this year.

A Britam report for the first quarter of this year showed apartments continue to dominate the sales markets across all income segments.

As such, the report noted, the prices of apartments have also registered high increases compared to that of bungalows and maisonettes, though modest.