Thursday, March 29, 2012

Nairobi luxury real estate prices soar

A view of the Real Estate in Upper market areas of Westlands in Nairobi.

Photo/FILE A view of the Real Estate in Upper market areas of Westlands in Nairobi. 

Nairobi recorded the highest rate of growth in luxury real estate prices in the world in 2011 with the Kenyan coast coming in second, according to rankings released by the World Wealth Report 2012.

The Kenyan capital city recorded a 25 per cent increase topping the Knight Frank Prime International Residential Index (PIRI), while prices in the Kenyan coast rose by 21 per cent. In third place was Miami at 19 per cent.

No other African cities were ranked in PIRI, which listed 71 cities.

The report described Nairobi’s performance as “startling” as the highest rates of growth were expected in areas with the strongest economic growth as well as European safe havens.

According to Ben Woodhams, managing director of Knight Frank Kenya, though the country may not be considered a “Safe haven” in the global context, it is viewed as one when compared to many of her neighbours.

He attributed the stunning rise of luxury real estate prices to the country’s rapid economic development, which is attracting domestic and international private equity, with particular growth in remittances flowing from Kenya’s increasingly affluent Diaspora.

He, however, pointed to recent spates of kidnapping of tourists as well as a sharp increase in interest rates to almost 25 per cent as a potential vulnerability of some emerging prime markets.