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Crackdown On Foreign Expatriates Sends Rent Rates Staggering In Uppermarket Areas

A section of Karen Estate. [PHOTO/ COURTESY]

Rental prices in upper market areas in Nairobi went down by four percent in the first three months of 2019 by, real estate firm Hass Consult has reported.

According to the report released yesterday, the drop s attributable to last year’s government crackdown on expatriates working in the country illegally, most of whom prefer living in the areas. The crackdown saw over 4,000 foreigners arrested, with some being deported while others were detained.

This steady attrition in numbers was accelerated last year in the new government drive curbing work permits. This triggered a new uptick in international departures, which by the first quarter of 2019 had resulted in significant falls in the sales prices and rents of top-end detached houses, which fell by 4.4 per cent and 4 per cent respectively in the first 12 weeks of the year,” said Sakina Hassanali, head of development consulting and research at Hass Consult.

The report forecasted a continued downward growth of prices, unless “the international economy improves or Kenya initiates policies to attract renewed growth in international residency.”

The most affected areas include Muthaiga, Karen, Nyari, Runda and Spring Valley.

The drop was also attributed to reduced budget foreign NGOs since the 2007/08 post-election violence that caused instability in the country.

“Many international and aid-funded organisations have retrenched,” said Hassanali, adding that grassroot development has also choked vibrant life in the city.

However, while the top end of the market has been affected by global trends and domestic policies, the other strong mover has come in apartment rentals.

“We reported in January that 2018 had seen signs of a revival in apartment rents, after nearly a decade of negative or flat growth caused by the bulge of building of new apartments, both as large high-rise blocks, for instance, across Kilimani, and as smaller multi-storey units built by private landlords throughout Ruiru, Ruaka, Juja and other Nairobi satellite districts,” added Hassanali.

Read: Housing Fund Levy Comes Into Effect Days After Trade Union’s Nod

The long-term stasis in apartment rents, and some difficulties in filling such blocks brought a slow-down in apartment building. But Nairobi’s population continues to grow, as does the city economy, and its working classes.

“We are seeing some evidence of a ‘catch-up’ of demand to current levels of supplies in the apartment rental market. This has introduced some upwards pressure on rentals, which rose by 4.9 per cent in the 12 weeks to the end of March this year, and 19.6 per cent in the year to March,” she said.

The sale of apartments has not yet been affected by similar pressures, with landlords deterred by the 10 years of relatively lower returns on their investment, and first-time buyers confined to higher income brackets, more interested in town houses.
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Francis Muli

Written by Francis Muli

Senior reporter at Kahawa Tungu, Muli has a passion for human interest stories. He believes in unearthing societal rots that have been hidden from the public eye. He has also carved himself a niche in writing business stories. He has worked for various organisations including Kenya Television Service, Business Today among others. Follow him on Twitter @FmuliKE.

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