Apartment prices in Nairobi’s high-end areas and satellite towns have declined in the past three years in the wake of increased supply and a shift in buyers' preference for stand-alone units.
The price of a top three-bedroom apartment in Eastlands and towns like Mavoko and Kiambu was Sh18 million as at the end of 2025, down from Sh21 million three years earlier, according to data from the Kenya National Bureau of Statistics (KNBS).
Apartments in high-end areas such as Lavington, Riverside and Karen reflected a similar pattern with a typical three-bedroom flat selling at Sh18.9 million down from Sh20 million three years earlier.
Prices of typical standalone houses across the different areas were higher, with the trend signalling a shift from apartments in favour of private units.
“Apartments exhibit sustained downward pressure, which may be partly due to subdued market performance, weaker demand, possible oversupply in some urban segments and shifting buyer preferences,” said KNBS.
Notably, a stand-alone house serving the same income classes rose over the same period. A three-bedroom house in upper Nairobi was selling at Sh23.5 million at the end of 2025, up from Sh20.25 million, while those in mid-income areas rose to Sh8.25 million from Sh8 million.
“This increase reflects strong demand for standalone homes in suburban and peri-urban areas, supported by strong buyer preference and limited supply in some urban segments,” added KNBS.
Analysts reckon the index does not indicate a change in price for developments that were already in the market, but lower entry prices for new projects in the middle of increased supply and lower demand, as the profile of residents in the areas changes.
“Over time, we have had a price correction driven by oversupply in some segments. Land prices on the upper end have been high, so the only way to recoup has been through densification, resulting in the oversupply,” said Johnson Ndenge, a real estate consultant.
“Uptake of the upper end for investments has slowed down with fewer expatriates taking residency, and the locals buying in that segment prefer residing rather than renting,” added Mr Ndenge.
Lower uptake of units for Airbnbs, especially in the upper-end markets, due to concentration also blunted the asking prices of developers. Five-bedroom flats have experienced the largest change, with a typical one selling at Sh40 million at the end of 2025 from Sh54 million early 2022.
Apartments in areas classified as Nairobi middle, which include Lang’ata, Parklands, Kileleshwa and Hurlingham, broke the trend with slight gains.
A three-bedroom in the middle area sold at Sh10.5 million at the end of 2025, up from Sh10.3 million in 2022, while a two-bedroom rose to Sh8 million from Sh7.5 million.
The prices of the apartments in the high-end areas were similar to those in other areas, such as Syokimau, which was attributed to the development of high-quality units outside the city as the clients’ profile of those living in towns surrounding Nairobi changes.
Mr Ndenge noted buyers of a three-bedroom flat in areas such as Syokimau would be willing to pay a higher margin as they were looking for rental returns, while those at the high end were looking for dwellings, resulting in the near convergence of prices across the different classes.
A periodic housing index report done by real estate firm HassConsult captured the same trend, with 10 out of the 18 suburbs and satellite towns surveyed reporting lower apartment prices in the year to March 2026, led by Westlands and Upperhill, where prices fell by 7.9 percent and 6.8 percent, respectively.
Other areas with falling apartment prices included Lavington (-6.4 percent), Ongata Rongai (-5.5 percent) and Ruaka (-5.1 percent). In contrast, prices of standalone houses rose in 11 out of 14 suburbs, led by Karen and Lavington at 13.2 percent and 12.7 percent, respectively.
In the 10 satellite towns surveyed for house prices, eight recorded higher prices, led by Tigoni at 6.3 percent and Ruiru at 6.2 percent.
“The supply of standalones has been very low and that is because it is very capital intensive as they need huge tracts of land - there is demand but low supply which is driving the prices,” said HassConsult Co-CEO & Creative Director Sakina Hassanali, the HassConsult co-CEO and creative director.
Urbanisation of satellite towns has made it cheaper for developers to buy tracts of land in the outskirts of Nairobi and set up quality standalone houses that are attracting buyers looking for privacy.
Analysts note the correction does not mean the demand for residential units in the country has been satisfied.
“If you look globally at residential apartment yields, they are about 3 to 4 percent, but in Nairobi, average is about 8 percent, which shows that rental prices in relation to property prices are still high ,” said Ms Hassanali.
The consultancy expects rent prices in Nairobi to drop in small margins as people move from the city into the satellite towns, owing to improved infrastructure and development of quality units in the easily accessible outskirts.
A possible rise in inflation due to the Iran war would also put pressure on household budgets, reducing the ability of tenants to keep meeting higher asking prices by landlords.
In the past, periods of economic shock have forced landlords to freeze rental price increments to protect the occupancy levels in their properties.
