A new report has revealed that Nairobi’s apartment sales market faced significant pressure in 2025. According to the Hass Property Index Q4 2025 report, this was driven largely by localised oversupply in high-density suburbs.
While the overall property market in the city continued to grow, specific areas recorded sharp declines in sales prices as successive waves of new developments came onto the market.
Westlands topped the list of worst-hit suburbs, with apartment prices falling 11.5 per cent over the year, although the decline slowed to just 0.5 per cent in the final quarter of 2025.
Hass Consult highlighted that a steep rise in Westlands apartment rents in 2013, as it emerged as the city’s most vibrant quarter, took rents from an average of Ksh91,000 a month to over Ksh115,000 in a single year, triggering a raft of new developments.
“Successive waves of construction have since led to several dips as new supply came to market, generating new rent falls from January to April 2025, before stabilising at around Ksh134,000 from May. By the fourth quarter, the stabilization in rents and improved occupancy had stopped the sales price decline.”
Kileleshwa followed with a 10.3 per cent annual drop but staged a modest recovery in the last quarter, posting a 1.3 per cent gain. Langata, Upper Hill, and Parklands also experienced declines of between 7.3 and 7.8 per cent, signaling a market correction in some of the city’s previously overheated areas.
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The report attributed these declines to “successive waves of construction” and very large development projects, particularly in Westlands, where the 2013 rental boom triggered a pipeline of apartments that continues to affect prices.
Hass Property Index report on Nairobi’s worst-hit apartment markets
It further emphasized that these declines are cyclical rather than structural, noting that “demand has never stopped expanding, but each area is now finely tuned in the volume of new development it can absorb at a time.”
Signs of stabilization emerged in the final quarter of 2025. In Westlands, sales declines slowed as demand began to catch up with the oversupply, while Kileleshwa apartments posted positive growth.
Apartment rents across most suburbs also turned positive, contributing to Nairobi reaching a historic rental yield milestone of 7.4 percent, the highest since records began in 2007.
Developers of large-scale projects were forced to offer discounts to secure occupancy, while buy-to-let investors saw rents fall in the early part of the year before stabilizing in mid-2025.
Long-term holders of apartments benefited from rising rental yields, underlining the investment potential of the sector despite short-term price volatility.
Sakina Hassanali, Co-CEO of HassConsult, said that while the market had experienced temporary dips, “each area is now finely tuned in the volume of new development it can absorb at a time.”
“In the apartments market, demand has never stopped expanding, but each area is now finely tuned in the volume of new development it can absorb at a time, and very large developments often create a dip in rates as entrants discount to gain full occupancy,” said Sakina.
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Analysts expect that rental-driven growth will continue in 2026, potentially supporting a rebound in apartment sales prices in previously oversupplied areas.
The report also highlighted a long-term structural shift in Nairobi’s property market. Apartments now dominate 71.1 percent of the sales market, up from 23.5 percent in 2001, while their share of the rental market has grown from 45.3 percent to 66.1 percent over the same period.
Despite the downturn in some suburbs, areas such as Syokimau and Riverside remained resilient, with annual price increases of 10.1 percent and 2.7 percent, respectively, while premium house markets like Lavington and Runda recorded strong rental growth, reflecting sustained demand for high-end living.
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