It’s no secret real estate prices in Nairobi have seen phenomenal growth over the last 10 years, driven by an improving economy, rural-urban migration, easier access to home loans and increasingly wealthy Kenyans abroad investing their money back home. What is surprising though, is that in 2011, prices at the top end of the market grew at the fastest rate in the world.
According to a new wealth report from Knight Frank and Citi Private Wealth, prices for high-end real estate in Nairobi jumped 25 percent in 2011. And the Kenyan Coast recorded the second highest growth, with a price jump of 20 percent, beating Miami which came in third, with a price increase of 19.1 percent for luxury real estate, followed by Bali, Jakarta and London in 6th place.
So what drove the growth in Nairobi? The report, which calls the increase “startling,” explains:
The startling performance at the top end of Kenya’s housing market is a particularly interesting example of this. Price growth in both the Kenyan capital Nairobi and the country’s Indian Ocean coastal hotspots outstripped all other PIRI locations, with Nairobi property chalking up a 25% increase last year.
“Safe haven” isn’t necessarily a phrase many people would use to describe the country in a global context, but compared with many of its neighbours it is just that, according to Ben Woodhams, Managing Director of Knight Frank Kenya. He says that Kenya’s rapid economic development is attracting domestic and international private equity, with particular growth in remittances flowing from Kenya’s increasingly affluent diaspora. However, recent events such as the kidnapping of tourists staying on the north coast and a sharp rise in interest rates to almost 25% also highlight the potential vulnerability of some emerging prime markets.
These are the 10 places where luxury residential real estate prices increased the most in 2011:
Knight Frank’s Prime International Residential Index (PIRI) has provided a unique monitor of price changes across the world’s luxury property markets since 2007. It tracks luxury real estate prices in 71 locations across the world.
Check out the Wealth Report’s Prime Numbers