Residential Projects
High Vacancy Rates Amid Nairobi’s Housing Boom
High rents have scared away tenants who opt for older flats that are cheaper.
Steeply rising rents have been fuelling an unprecedented housing boom in Nairobi, with developers putting up twice as many homes as they were building a year ago.
Latest statistical figures from the Kenya National Bureau of Statistics (KNBS) show that the value of residential properties built in Nairobi stood at Sh14.6 billion in December 2014 – more than double the value of homes built in January last year, which stood at Sh6.6 billion.
The total value of residential properties built in Nairobi in 2014 stood at Sh120 billion.
The housing boom is accelerating at an alarming rate amid reports that landlords are finding it difficult to attract tenants in several suburbs of Nairobi following the increased construction of apartments in the county.
The high lending rates and the steep cost of land in Nairobi have made it costly to build homes in the city, meaning developers must charge high rents to recoup their investment within reasonable timelines.
Most of the apartments target middle-income earners, with the average rent for a two-bedroom house being between Sh15,000 and Sh35,000 depending on location.
RELATED: Buxton Point Builder Bets on Tech to Quicken Work
This has scared away tenants who opt for older flats that are relatively cheaper.
“When you build many houses going for such rent, some will remain unoccupied because there are people who need cheaper houses but will not find them,” says Antony Kuyo, an agent with Avent Properties.
The housing glut, however, is being experienced in the middle-income and some high-income suburbs which most developers have been focusing on in recent years.
It is likely that, in coming years, developers will shift focus to the lower middle-income and low-income housing segment where demand is steeply rising amid nearly zero supply.
The countrywide demand for housing is estimated at 200,000 units annually against a supply of about 45,000 a year. The bulk of this demand is in the low-income market segment.
Mukuru Affordable Housing Handover Set for December
Bedsitters will rent for Sh3,200 per month on a 30-year rent-to-own plan.
Developer Unveils Sh30bn Gated Estate in Kiambu
The 240-acre Kofi Ridge estate in Ruiru, Kiambu, will be completed in 25 years.
Trump’s $3 Billion Condo Project Advances in Florida
Initial approval granted for Donald Trump’s luxury condo in Doral.
China on Brink of Sh180bn Highway Deal with Kenya
Talks are underway for China to fund a new highway and rail extension.
Work Begins on Sh11.6bn Geothermal Plant in Nakuru
The Chinese-funded Orpower 22 power plant will take 17 months to complete.
Turkish Firm Inks $3bn Deal for Uganda Electric Railway
Yapı Merkezi is expected to complete the 272-kilometre railway in 48 months.