Some 18 percent of Kenya’s high-net-worth individuals’ (HNWIs) – those with a net worth of $1 million excluding their primary residences – bought new homes in the country in 2018, with only 8 percent purchasing houses abroad.
According to The Wealth Report’s Attitudes Survey, released in Nairobi on Wednesday, 22 percent of Kenya’s wealthy plan to buy new homes in the country in 2019/2020.
First and second homes make up 45 percent of total wealth for Kenya’s super-rich, with the HNWIs owning an average of 2.7 homes, according to The Wealth Report.
Their South African counterparts own an average of four homes each.
The super-rich took the opportunity to snap up new homes during the year as luxury residential prices softened amid an oversupply in the high-end market segment, tighter liquidity and a general market correction, making it a buyers’ market.
Nairobi’s ranking slipped to 92nd in the Knight Frank Prime International Residential Index (PIRI), from 75th in the previous year, as prime residential prices softened by 4.5 percent in 2018.
South Africa’s Cape Town is ranked 28th following a 3.8 percent price growth in 2018.
Manila, Philippines, posted an 11.1 percent growth, topping the PIRI which tracks luxury home price movements in 100 locations.
Despite the price drop last year, luxury property values in Nairobi have appreciated by 38 percent since 2010, according to Knight Frank Kenya research.
“As a result of the oversupply, developers have had to deliver higher specification property at lower prices. A relatively unfavourable economic environment has also affected demand,” said Ben Woodhams, Knight Frank Kenya Managing Director.
Data provided by GlobalData WealthInsight exclusively for The Wealth Report showed the number of HNWIs in Kenya increased to 9,482 in 2018 from 9,176 in the previous year, and is projected to increase by 22 percent to 11,584 by 2023.