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Supply outstrips demand for luxury homes in Nairobi

The prices of luxury houses in Nairobi dropped by one per cent in the first three months of the year due to an oversupply.

According to a report by real estate firm, Knight Frank, for the first quarter, developers built more houses in response to increased foreign investor interest in the city.

Consequently, the supply outstripped demand.

Knight Frank agency head Anthony Havelock on Thursday said the rapid growth in construction of houses was spurred by an expanding pool of local high-net worth individuals seeking trophy homes.

“Our data going back five years shows Nairobi has been a star performer globally, with values growing by 20-25 per cent per year. What we’ve seen over the last year is price stabilisation,” he said.

The quarterly report, ranking prime residential markets in 35 cities worldwide said Nairobi had witnessed a moderate growth in supply.

SOURCE: Daily Nation