The decision by the United States to cut off funding for its USAID programme and affiliated projects in Kenya has triggered mass layoffs and weakened demand in Nairobi’s high-end property market, even as satellite towns experience their fastest price growth in over two years.
The latest Hass Property Price Indices for the first quarter of 2025 show that overall property prices rose by 2.45 per cent, a sharp improvement from the 0.8 per cent recorded in the previous quarter. Annual growth, however, slightly dipped to 4.9 per cent from 5.2 per cent.
The report points to Nairobi’s satellite towns as the key drivers of the rebound, posting a 2.4 per cent increase in asking prices, with Juja and Limuru standing out at 4.2 and 4.0 per cent, respectively. All 10 surveyed towns recorded price gains across all property types.
“The overall price rebound was mainly driven by higher asking prices on property in Nairobi’s satellite towns, which led to growth of 2.4 per cent,” said Ms. Sakina Hassanali, Co-CEO & Creative Director at HassConsult.
She added, “The improvement of infrastructure and amenities has given satellite towns the convenience that was previously the preserve of suburbs, but at a lower average price point of KES 14.46 million per unit compared to KES 32.46 million in the suburbs, putting them within reach of a larger buyer pool.”
Property Price Drops
In contrast, property prices in Nairobi’s suburbs declined for a fifth straight quarter, falling by 0.4 per cent—though this marked a slight improvement from the 0.8 per cent contraction in the previous quarter. The downturn was most pronounced in Muthaiga (-4.9 per cent), Nyari (-4.7 per cent), and Kilimani (-4.6 per cent).
The impact of the USAID withdrawal was most visible in these suburbs. “The fall in asking prices revealed concerns about a fall in demand after the US cut off funding for its USAID programme and its affiliated programmes in Kenya. This action has led to mass layoffs, which affect the target market for the higher-end rental segment.”
Rental prices overall rose by 0.3 per cent in the first quarter of 2025, slightly up from 0.2 per cent in the previous quarter. Again, satellite towns led the gains, with average quarterly rent rising by 1.9 per cent, powered by Ruiru (5.3 per cent), Ngong (5.1 per cent), and Limuru (4.9 per cent).
“Improving economic conditions, including stable and low inflation, allowed landlords in satellite towns to raise average asking prices.”
The report also drew attention to broader international developments, noting that “geopolitical tensions, interest rate shifts and policy changes have prompted more cautious investor behaviour.” For instance, “the US commercial real estate sentiment dropped by 30.5 per cent in Q1 2025, while in Australia, investment lending rose by 18 per cent amid expectations of rate cuts and market volatility.”
As satellite towns continue to flourish and city suburbs falter, the data illustrates a property market undergoing transformation—shaped by shifting demand, global uncertainties, and the significant fallout from foreign funding decisions.
