Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
The report noted that the cheapest urban home in Kenya costs nearly four times the average 2020 salary of an average formally employed person/ WORLD BANK


Only 12.3 pc Kenyans can afford cheapest new urban houses – report

NAIROBI, Kenya, October 7 – A new report released by financial services corporation, EFG Hermes, has revealed that only 12.3 percent of Kenya’s households can afford the cheapest newly built urban homes compared to their counterparts in Senegal and Nigeria who ranked at 83.1 and  68.1 percent.

The report on  Kenya’s housing markets nonetheless ranked Kenya higher than Ghana, Uganda, Tanzania, and DRC which had 9.4 percent, 4.4 percent, 2.7 percent, and 0.7 percent rates respectively.

Morocco and Cote d’Ivoire were ranked at 52.4 and 26.8 percent by the data which was obtained from the Centre for Affordable Housing Finance in Africa (CAHF).

“The CAHF calculates that the cheapest cost of a newly built house by a formal developer or contractor in Kenya’s urban areas is USD26,014 (Ksh 2.7 million) and the average size of this unit is 88m2,” the survey said.

The average price of a house per meter square in  Nigeria ranked lower at USD255,000 while Tanzania and Senegal rates stood at USD270,000, and USD285,000.

The report noted that the cheapest urban home in Kenya costs nearly four times the average 2020 salary of an average formally employed person which was approximated by the Kenya National Bureau of Statistics (KNBS) at Kshs 801,733 per year.

“Worryingly, a person working in financial services, which boasts the highest average annual salary Kshs 2.1 million in Kenya, could not afford the cheapest urban home with one year’s gross salary,” the report noted.

Upper Hill, Westlands, and Kitisuru were named  Nairobi’s most expensive suburbs selling at Kshs 512 million, Kshsh 423 million, and Kshs 417 million per acre respectively.

“We estimate that if an average employee in the financial services sector was provided an interest-free loan, it would take them 247 years and 204 years to buy an acre in Upperhill and Westlands, respectively,” the report noted.

Advertisement. Scroll to continue reading.

Donholm was, on the other hand, named as the only suburb that has continued to see its land prices materially appreciate with an acre going for Kshs 71 million.

Runda, Muthaiga, Kileleshwa, Lavington, Parklands, and Donholm were ranked among the least expensive suburbs in Nairobi.

“Given the high cost of land in Nairobi’s suburbs, the formally employed have been increasingly moving to the satellite towns around Nairobi. At a cost of Kshs 12.4 million per acre, we calculate that it would take an average employee in the financial services sector six years to buy an acre in Kitengela, which is around 30km from downtown Nairobi.” the report added.

Among all satellite towns within Nairobi, Ruaka was named with the highest cost of land at  Kshs 90 million followed by Kiambu at Kshs 35 million), Mlolongo (Kshs 30 million), and Kitengela (Kshs 12.4 million).

For commercial purposes, the cost of land in Ruiru was ranked highest at  (Kshs 25 million) followed by Thika (Kshs 19 million), Juja (Kshs 14 million), and Athi River (Kshs 14.5 million).

It, however, noted that current land prices in the high-end residential segment have fallen significantly from their peak levels over the past four years.


Click to comment

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...


NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...


NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...


NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...


NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...