Kenya’s property market showed mixed performance in the second quarter of 2025, with land once again proving to be the most stable investment segment even as residential values adjusted to new market realities. The latest Azipa Real Estate Property Price Index Report draws on national data for both land and housing, providing a detailed snapshot of prices, rental yields, and investor sentiment across the Nairobi Metropolitan Area and key regional towns.
Land Market Continues to Outperform
According to the data, the average price of land within the Nairobi Metropolitan Area increased by about 1.4 percent quarter-on-quarter. Satellite towns continued to deliver higher returns than inner-city suburbs, underscoring the enduring strength of peri-urban investment. Kitengela, Juja, and Syokimau recorded quarterly gains of between 1.5 and 2.3 percent, supported by improved infrastructure and the relocation of middle-income buyers.
Land Price Growth by Region, Q2 2025
| Region (Nairobi Metropolitan) | Average Land Price Q1 2025 (KSh million/acre) | Average Land Price Q2 2025 (KSh million/acre) | Quarterly % Change |
|---|---|---|---|
| Karen | 76.2 | 77.0 | +1.1 % |
| Kileleshwa | 335.4 | 338.4 | +0.9 % |
| Lavington | 204.7 | 206.5 | +0.9 % |
| Kilimani | 387.0 | 387.2 | 0.0 % |
| Upper Hill | 500.3 | 497.2 | –0.6 % |
| Parklands | 403.1 | 401.0 | –0.5 % |
| Ruaka | 93.6 | 95.5 | +2.0 % |
| Juja | 23.7 | 24.2 | +2.1 % |
| Kitengela | 18.3 | 18.7 | +2.3 % |
| Syokimau | 20.9 | 21.2 | +1.4 % |
Within Nairobi’s core zones, price growth was slower but still positive. Kileleshwa and Lavington posted mild increases of 0.6 to 0.9 percent, while Kilimani remained broadly unchanged due to oversupply of high-rise developments. By contrast, Upper Hill and Parklands saw slight declines as developers focused on mixed-use projects rather than new residential towers. The aggregate land price index for Nairobi stood 6.8 percent higher year-on-year, continuing an upward trajectory that has persisted since late 2023.
Detached Housing and Apartments Show Stabilization
The residential market experienced only marginal movement in Q2 2025. Detached units registered a quarterly price change of -0.2 percent, while semi-detached units edged up 0.5 percent. Apartments across the metropolitan region showed an average increase of 0.3 percent, reflecting early signs of price stabilization after a year of correction. Demand remained strongest for two- and three-bedroom apartments priced between KSh 8 million and 15 million, the range most accessible to middle-income households.
Residential Property Price Index, Q1 2024 – Q2 2025
| Quarter | Detached Houses (Index = 100 in Q1 2024) | Semi-Detached | Apartments | Weighted Market Index |
|---|---|---|---|---|
| Q1 2024 | 100.0 | 100.0 | 100.0 | 100.0 |
| Q2 2024 | 99.8 | 100.6 | 100.2 | 100.3 |
| Q3 2024 | 99.6 | 101.0 | 100.5 | 100.5 |
| Q4 2024 | 99.4 | 101.3 | 100.7 | 100.6 |
| Q1 2025 | 99.2 | 101.5 | 100.9 | 100.7 |
| Q2 2025 | 99.0 (–0.2 %) | 102.0 (+0.5 %) | 101.2 (+0.3 %) | 100.8 (+0.1 %) |
Rents remained broadly stable. The rental index for detached houses was unchanged quarter-on-quarter, while apartment rents rose by 0.8 percent on the back of improved occupancy levels. This translated to an average gross rental yield of 6.1 percent for apartments and 5.5 percent for detached homes, consistent with long-term norms.
Land as a Long-Term Hedge
One of the clearest messages from the Azipa Real Estate Property Price Index Report is that land continues to outperform built properties as an inflation hedge. The long-term annual growth rate for serviced plots now averages 8 to 9 percent, compared with 3 to 4 percent for apartments. Investors remain drawn to land’s low maintenance costs and flexibility, especially in areas earmarked for future infrastructure upgrades.
Comparative Annual Returns – Land vs Residential, 2020-2025
| Year | Average Land Return % | Residential Return % | Cumulative 5-Year Gap (bps) |
|---|---|---|---|
| 2020 | 6.4 % | 2.8 % | +360 |
| 2021 | 7.1 % | 3.4 % | +370 |
| 2022 | 8.0 % | 3.6 % | +440 |
| 2023 | 8.5 % | 3.9 % | +460 |
| 2024 | 8.8 % | 4.1 % | +470 |
| 2025 (YTD) | 9.0 % | 4.2 % | +480 |
The data also reveal that commercial-oriented corridors such as Thika Road and Waiyaki Way are consolidating as investment hubs, buoyed by improved road networks and the expansion of industrial parks. These zones recorded the highest quarter-on-quarter increases in asking prices for both land and rental units.
Regional Trends and Secondary Cities
Beyond Nairobi, secondary urban centers continued to build momentum. Nakuru led with a 2.4 percent quarterly rise in land values, supported by new industrial and logistics projects following its elevation to city status. Eldoret and Kisumu followed with growth rates of 1.7 and 1.2 percent, respectively, as expanding road and energy networks drew private investment. These figures confirm that Kenya’s property growth story is gradually spreading beyond the capital.
Land Price Change in Major Regional Cities, Q2 2025
| City | Average Price Q1 2025 (KSh million/acre) | Q2 2025 (KSh million/acre) | Quarterly % Change | Key Growth Driver |
|---|---|---|---|---|
| Nakuru | 18.9 | 19.4 | +2.4 % | Industrial expansion, city status |
| Eldoret | 15.6 | 15.9 | +1.7 % | Agro-logistics projects |
| Kisumu | 13.8 | 14.0 | +1.2 % | Port rehabilitation, transport links |
| Mombasa | 25.1 | 25.2 | +0.4 % | Tourism rebound |
| Nyeri | 12.0 | 12.1 | +0.8 % | Suburban demand |
| Nairobi Metropolitan Average | 93.4 | 94.7 | +1.4 % | Infrastructure growth |
International and Institutional Investment Flows
The report also highlights renewed foreign interest in Kenyan real estate. International investors increased exposure to residential and commercial projects in Nairobi by an estimated 6 percent over the past year. The international property performance comparison shows Kenya outpacing most emerging-market peers, with total returns of 9.3 percent over the last 12 months. This outperformance stems from a combination of currency stability and consistent rental demand.
Kenya vs Global Emerging Market Property Returns, 2023-2025
| Market / Region | 2023 Total Return % | 2024 Total Return % | 12-Month Change (bps) | 2025 YTD Performance % |
|---|---|---|---|---|
| Kenya | 8.5 % | 9.3 % | +80 | +4.5 % (Q2) |
| Nigeria | 6.8 % | 6.9 % | +10 | 3.1 % |
| South Africa | 5.5 % | 5.8 % | +30 | 2.7 % |
| Egypt | 7.2 % | 7.5 % | +30 | 3.4 % |
| Ghana | 6.1 % | 6.3 % | +20 | 3.0 % |
| Global Emerging Average | 6.8 % | 7.2 % | +40 | 3.3 % |
Institutional participation remains concentrated in master-planned communities and income-producing assets. Developers and fund managers have increasingly favored green-certified projects and energy-efficient designs, aligning with global ESG benchmarks that are now influencing financing decisions.
Outlook for the Remainder of 2025
Azipa Real Estate projects a cautiously optimistic outlook for the remainder of 2025. Land prices are expected to maintain an upward bias of between 1 and 1.5 percent per quarter, supported by infrastructure rollout and continued migration toward suburban and secondary-city corridors. Residential prices are forecast to remain stable, with pockets of growth in affordable and mid-market housing. Rental performance is likely to strengthen slightly as consumer confidence improves and mortgage rates ease.
Market risks remain, including high construction input costs and currency-linked financing pressures. Nonetheless, Kenya’s favorable demographics, urbanization rate, and policy emphasis on housing delivery continue to anchor long-term demand.
Conclusion
The Azipa Real Estate Property Price Index Report captures a sector in gradual recovery — one where land leads performance, residential values stabilize, and investor sentiment shifts toward sustainability and long-term value creation. The data show that Kenya’s property market remains resilient despite economic fluctuations, offering both local and international investors opportunities grounded in fundamentals.
As infrastructure projects advance and financing conditions normalize, the country’s real estate landscape is set to expand beyond Nairobi’s traditional centers, creating a more balanced and inclusive market. For investors, the message is clear: strategic positioning, data-driven decision-making, and patience remain the keys to unlocking Kenya’s evolving property potential.
