The Nairobi Metropolitan Area (NMA) residential market has experienced varied trends in rental prices in 2024/25, with some areas showing notable declines, while others remained resilient despite ongoing economic pressures.

According to the latest Nairobi Metropolitan Area Residential Report 2025 by Cytonn Investments, rent prices have generally decreased in several key areas, particularly in high-end suburbs, while areas in the lower middle-income and satellite towns saw some stability or moderate growth.

2025-08-19T15:00:08+00:00

The average rent per square meter in Lower Kabete dropped by 7.7%, from Sh671 in FY’2023 to Sh619 in FY’2024. 

Similarly, Runda saw a reduction of 7.7% in its rental rates. These declines are largely attributed to reduced demand in the face of increasing construction costs, economic uncertainty, and a high cost of living that has limited the affordability of premium properties for many potential tenants.

For example, a typical 3-bedroom house of about 180 square meters saw a decrease in rent from Sh120,780 per month in FY’2023 to Sh111,420 per month in FY’2024, reflecting a 7.7% reduction.

In upper middle-income suburbs like Loresho, South B/C, and Ridgeways, the rental yields showed modest decreases, with rents per square meter falling from Sh632 to Sh609 in Loresho and from Sh599 to Sh567 in South B/C. 

While these areas are still relatively popular, the drop in rents indicates that demand is not as strong as it once was, likely driven by shifts in preferences towards more affordable areas as economic pressures continue to mount.

For example, a 2-bedroom apartment of about 100 square meters saw rents drop from Sh59,900 per month in FY’2023 to Sh56,700 per month in FY’2024.

On the other hand, some lower-middle-income suburbs like Kitengela and Juja have seen relatively stable rents. 

For instance, Kitengela recorded a slight 1.2% decrease in rent, maintaining rents at Sh567 per square meter. 

However, Juja witnessed a more noticeable drop in rents, falling from Sh599 to Sh567, reflecting some challenges in these regions in terms of rental price growth.

The satellite towns in the lower middle-income segment, including Ngong, Ruiru, and Ruaka, showed a more mixed picture. 

Ngong, for example, had a stable rent price but experienced a 3.1% increase in price appreciation, suggesting that while rents have remained constant, the overall value of properties is rising.

The rent for an 80-square-meter 2-bedroom apartment has remained at Sh45,360 per month, showing no significant change.

The apartment market also presented a mixed performance. Areas such as Kilimani, Westlands, and Parklands saw slight decreases in rental rates, with rents per square meter dropping from Sh656 to Sh632 in Westlands, signalling a cooling demand in these traditionally high-demand areas. 

However, Kahawa West, a growing area in the lower middle-income segment, saw impressive rental yields, with 12.0% total returns attributed to a 8.3% price appreciation. 

This growth reflects the area’s increasing attractiveness due to its proximity to infrastructure developments and growing middle-class demand.

Rising inflation, high construction costs, and an increase in transaction costs are placing pressure on both tenants and landlords.

Supply and Demand Imbalance

While demand for housing continues to grow, particularly in lower-middle-income areas, the high cost of housing in premium neighbourhoods has made these areas less accessible to many potential renters.

Increased Availability of Alternative Housing

New developments in satellite towns like Kahawa West, Kitengela, and Ngong offer more affordable options, attracting renters who might otherwise have looked for accommodation in more expensive areas.

Despite the dips in rents in some areas, the residential sector in Nairobi is expected to remain resilient due to continued urbanisation and the government’s push for affordable housing. 

According to the report, the ongoing Affordable Housing Programme (AHP) and increased participation from the private sector will continue to address the housing deficit, particularly for the low-income and middle-class segments. 

As Kenya’s population grows, demand for affordable housing is expected to rise, which could lead to a stabilisation of rent prices in these areas.

In conclusion, while premium areas like Runda and Karen see reduced rent growth, opportunities in lower middle-income suburbs such as Kitengela and Ngong are growing. 

Investors and renters alike should keep an eye on shifting patterns in demand and government initiatives as they navigate the evolving Nairobi residential market.