Apartment prices in Kenya have fallen for the fourth quarter in a row amid an oversupply of flats as the cost of maisonettes, bungalows and villas rose by 8.5 per cent in the year to March
Latest Kenya National Bureau of Statistics (KNBS) data shows the cost of apartments fell by three per cent in the year to March.
The cost of flats has fallen in the last 13 quarters, save for the three months to March 2025 and the first and third quarters of 2024.
However, demand for standalone homes has increased, with the cost of maisonettes and bungalows rising in all quarters with the exception of the three months to June 2023.
This has made it cheaper for home buyers to acquire apartments as the oversupply hurts investors’ returns.
“The average price of residential properties increased by 4.8 per cent between Q1 2025 and Q1 2026, driven by an 8.5 per cent rise in standalone house prices,” KNBS says in its quarter one report.
Apartment prices in Nairobi’s high-end estates fell by 4.8 per cent, with the decrease extending into the city’s middle-income neighbourhoods, where the cost of flats dropped by 3.3 per cent.
Apartments at Garden City Mall in Nairobi.
Photo credit: File | Nation Media Group
The soft prices follow an increase in the construction of apartments in recent years that has left developers struggling as supply trails demand.
Developers in Nairobi continue delivering apartment projects initiated years ago, adding new stock into a market where demand has expanded at a slower pace than supply.
In recent years, suburbs like Kilimani, Kileleshwa and Parklands have shifted from predominantly hosting single-dweller housing units to hosting multiple apartment blocks, resulting from changes in the city’s zoning laws.
Some resident associations have pushed back against these new developments, arguing that supporting infrastructure such as roads, sewer and water supply lines have not been upgraded to accommodate the larger numbers of residents in the multi-dweller units.
The surge in supply has put pressure on prices as developers increasingly rely on discounts, flexible payment plans and incentives to clear completed housing units.
The falling prices hit investors in Nairobi, with the cost of apartments increasing outside the capital at 7.5 per cent in the period.
Standalone houses recorded annual gains across the country, amid reduced supply as homeowners show a bias for maisonettes, bungalows and villas.
A recent KNBS survey showed that tenants aspiring to own homes show a strong preference for standalone housing, with 63.1 per cent saying they would opt for a bungalow if they were to build or buy.
Maisonettes followed at 23 per cent, while apartments – often marketed for their affordability and urban convenience – trailed at 9.5 per cent.
“The supply of standalones been low because it is capital intensive as they need huge tracts of land. There is demand but low supply is driving the prices,” said Sakina Hassanali, the HassConsult Chief Executive Officer and creative director.
The growth of satellite towns has made it cheaper for developers to buy land on the outskirts of Nairobi and set up quality standalone houses.
An apartment block in Kilimani, Nairobi.
Photo credit: File | Nation MediaGroup
Lower prices of apartments helped cut the average mortgage size for the first time in seven years, with Central Bank of Kenya data showing the mean home loan fell to Sh9 million in 2024 from Sh9.4 million a year earlier.
This came as the number of mortgages rose by 756 to 30,016 accounts.
