Nairobi, Mombasa property prices drop as supply outweighs demand

Kenya’s property market softened in the second half of 2025, with little price price movement in the last six months as supply outweighed demand and a shift by buyers towards infrastructure-backed areas.

This is according to the latest property index by BuyRentKenya for June-December 2025.

According to the report, there was minimal price change between the first and second half of the financial year across land, apartments, and standalone houses, indicating a market in consolidation rather than contraction.

The report shows that land prices were broadly flat nationwide, underscoring the asset class’s role as a defensive store of value for long-term investors.

In Nairobi’s upmarket, land continues to command high premiums, with an acre of land in Kilimani and Upper Hill now averaging between Sh450 million and Sh520 million.

Prices in Eastleigh, historically buoyed by mixed-use demand, moderated slightly to about Sh520 million, while parcels along the Kangundo corridor softened modestly.

In contrast, emerging peri-urban markets are attracting interest at lower entry points. An acre parcel of land in Juja and Isinya is now averaging Sh30 million and Sh6 million.

“Kenya’s property market remains resilient and evolving, despite economic pressures,” Elizabeth Costabir, CEO of BuyRentKenya, said. 

“While affordability continues to challenge many, data-driven decisions and strategic location choices are gradually reshaping homeownership possibilities.”

For instance, growth was more evident in areas like Juja, Limuru, and Kiserian — all of which experienced land price growth of more than 12 per cent for the year.

The report by BuyRentKenya mirrors another one by Hass Consult released late last month that shows land price growth edged down marginally to 5.92 per cent in 2025.

HassConsult Co-CEO, Sakina Hassanali, said the results record six years of annual growth of less than three per cent before the land price index took a negative trajectory from the second quarter of 2024, rising to five per cent by the close of 2025.

The three-year surge in satellite town land prices, which peaked in the third quarter of 2024 at 12.58 per cent, slowed far more rapidly, returning to decade-average levels of 6.21 per cent at the end of 2025, on quarterly growth of 1.59 per cent.

This is attributed to lower disposable income by the middle class, who have suffered major tax cuts on pay slips, while others are forced to take pay cuts as businesses struggle to survive in a tough economic environment.

Along the coast, Mombasa’s land market remains steady, though below Nairobi’s levels.

An acre parcel of land in prime areas in Mombasa, including Bamburi and Diani are currently going for Sh40 million and Sh25 million, reflecting consistent buyer demand driven by tourism-linked development and middle-income relocations.

The low growth was also witnessed in the housing sector, with prices softening by an average of 2.5 per cent in both suburbs and peri-urban regions, especially in Nairobi.

This is linked to rising supply triggered by both the government’s affordable housing and heavy investment by the private sector in a bid to close the housing deficit in the country.

A two-bedroom apartment in Kilimani averages Sh10 million, while similar units in Westlands trade near Sh11.3 million. In Kileleshwa, two-bedroom units sit near Sh9.5 million, and in Ruaka, about Sh7.8 million.

Two-bedroom units in Nyali and Bamburi, Mombasa’s most sought-after residential belts, are averaging Sh1.8 million to Sh4.7 million.

Even so, standalone houses in peri-urban zones recorded moderate gains of between four and six per cent in Ruiru, Kitengela, and Juja, supported by infrastructure upgrades and the expansion of gated communities.

Sewer connectivity, land sizes, electricity, and comparatively lower entry prices are reshaping peri-urban areas from speculative frontiers into viable residential hubs.