The Knight Frank Prime Global Cities Index for the second quarter 2016 showed luxury home prices in Nairobi city increased by 2.1% in the 12 months to June and by 1.3% in six months. A marginal 0.2% decline was recorded in the three months to June.
The stability in luxury residential sales has largely been sustained by realistic pricing. Transactions are still happening in low volumes, driven by a mix of buyers including Kenyans in the diaspora who are currently benefitting from the foreign exchange environment.
Ben Woodhams, Managing Director Knight Frank Kenya, said: “Buyers are aware of market conditions. However, high-end buyers are discerning and willing to pay a premium for the right property based on location and quality.”
In Nairobi, the PGCI tracks luxury homes currently priced from US$0.8 million (approx. Sh80 million); usually detached units of superior quality and finishing, each sitting on at least half an acre of land in a prime part of the city.
Supply of prime residential property has been growing gradually, with such homes increasingly being located in gated compounds.
However, Knight Frank data shows luxury home values in Nairobi have gained by 40% over the past five years to June 2016.
“Prime property investments have proven a safe and resilient option when compared to other alternatives such as the stock market,” Woodhams said.
The Knight Frank index, which tracks price changes in local currency, expanded its coverage in the second quarter to 37 key cities across the world.
Six of the cities covered in the PGCI recorded double-digit price increases, led by Vancouver with a 36.4% growth in the year to June. Shanghai, Cape Town, Toronto, Melbourne and Sydney posted increases of 22.5%, 16.1%, 12.6%, 11% and 10.2% respectively.
