Landlords across Kenya are opting to keep rental rates steady despite the turbulent nature of the economy, this is in a bid to maintain occupancy levels.
The trend, observed in the second quarter (Q2) of 2025, comes as the cost of living continues to erode disposable incomes and tightens tenants’ wallets. At the same time, land prices showed marginal growth within the same period
According to the Q2 property index by real estate consultancy HassConsult, land prices recorded a minimal drop of 0.2 per cent compared to a slight 0.3 per cent rise in the first quarter. The report cited a price-sensitive rental environment defined by stagnant wages and widespread job losses as a key factor in shaping landlord decisions.
Landlords are increasingly choosing to retain current rent prices to avoid vacancies in an economy where tenants are becoming more cautious about spending.
According to the report, rental rates for detached houses fell by 1.6 per cent while semi-detached units declined by 0.4 per cent from the previous quarter. On an annual basis, detached and semi-detached homes dropped by 0.2 per cent and 5.4 per cent respectively. Meanwhile, apartments bucked the trend with a rental increase of 2.4 per cent quarter-on-quarter and 3.3 per cent year-on-year.
Among Nairobi suburbs, Lang’ata posted the sharpest quarterly rental increase at 3.4 per cent, followed closely by Ridgeways at 3.3 per cent and Gigiri at 3.0 per cent. In contrast, Muthaiga, Kilimani and Westlands experienced marginal rental declines of 2.7, 1.2 and 1.7 per cent respectively. Apartments in Lang’ata showed the highest spike at 3.7 per cent, while Upperhill had the steepest drop at 4.6 per cent.
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As of June 2025, average rental prices have increased significantly over the years. Back in December 2000, the average rent stood at Ksh38,516. It now sits at Ksh167,825. For larger properties with 4 to 6 bedrooms, current rental rates average Ksh240,602, while smaller 1 to 3-bedroom units attract Ksh93,230.
While rental prices remain largely restrained, property values saw notable growth in Q2 2025. Overall, prices rose by 3.75 per cent during the quarter, compared to 2.45 per cent in Q1. Leading this surge was the detached housing segment, mainly townhouses and villas which expanded by 5 per cent. Semi-detached houses and apartments followed with slower gains of 1.3 and 1.1 per cent respectively.
The report highlighted that this is the fastest growth pace for detached homes in nine years. Elite suburbs such as Muthaiga, Karen and Runda, areas predominantly occupied by standalone homes drove the upward trend, attributed to limited availability in supply.
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In terms of investment attractiveness, the annual price growth of 7.8 per cent for all property and 10.9 per cent for detached houses has positioned real estate as a competitive option compared to other financial instruments. For example, government Treasury bills currently yield between 8.1 and 9.7 per cent, a notable decline from 16 per cent a year ago.
Land values, while continuing to appreciate, showed tempered growth. The quarter saw an increase of just 1.6 per cent, slightly lower than the 1.7 per cent seen in Q1. Satellite towns posted modest appreciation as well. The report revealed that all 18 surveyed Nairobi suburbs experienced positive price movement, though only Parklands and Spring Valley surpassed the 2 per cent mark.
While property continues to gain value and offer promising investment returns, landlords appear wary of testing tenants’ financial limits, choosing to prioritize occupancy over short-term profit. This reflects the delicate balancing act between investment growth and tenant affordability in an increasingly strained economic environment.
By Masaki Enock
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