Why property investors are losing money and where returns still hold
Nairobi property investors are facing financial strain due to rising vacancies, escalating service charges, and shrinking returns in popular investment zones. Experts attribute this to systemic misalignment, poor development design, and pricing distortions.
Nairobi's real estate market is under strain as investors face rising vacancies, escalating service charges, and shrinking returns. According to Roy M. Githaiga, founder of MUDA Design, the Nairobi apartment market is underperforming due to systemic misalignment. High service charges, particularly in high-density apartment blocks, are a significant drain on returns. Many developments are designed with a short-term mindset, prioritizing capital expenditure over operational efficiency. Vacancies are also a growing concern, even in prime locations, due to design flaws and pricing distortions. Kenya Mortgage Refinance Company CEO Johnstone Oltetia warns that buy-to-let investments financed through commercial mortgages are increasingly vulnerable to interest rate fluctuations and rental income disruptions.
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