Nairobi is the only African city listed among 45 global cities that recorded annual growth in the third quarter of 2022, according to the Prime Global Cities Index by realtor Knight Frank.
Nairobi’s ranking has moved up seven places to 29 in the 12 months to September from 35 in the same period last year. This was one position behind Geneva, which ranked 30, raising the status of Kenya’s capital as a favourite investment destination in Africa.
The jump in Nairobi’s position comes after luxury houses registered a 2.9% price growth in the period from 1.3% over a 12-month period to September 2021. Swiss city Geneva recorded a 3.2% price rise.
The rise in prices of prime properties in Nairobi comes as prime price growth dipped for the second consecutive quarter in Q3 2022 globally.
The index, which tracks the movement in the top 5% of residential prices across 45 global cities, recorded average annual growth of 7.5% in Q3 2022, down from a peak of 10% in Q1 2022.
However, at 7.5%, annual growth still sits above the index’s average five-year growth rate of 4.4%, and the number of cities registering year-on-year price falls has only shifted from six last quarter to seven this quarter. But dig deeper and the quarterly data reveals a marked slowdown.
Of the 45 cities tracked, 19 saw prime prices decline between June and September 2022, up from seven in Q1 2022. Dubai had the fastest-rising prime price in the period at 88.8%.
Kenya’s economy is expected to grow 5.3% in this year, down from 7.5% posted in 2021, and 6% in 2023, according to Njuguna Ndung’u, Cabinet Secretary for the National Treasury and Economic Planning. Like other economies around the world, the East African nation is experiencing a surge in prices of basic commodities, which has been exacerbated by the worst drought in four decades.
The government said it will lower inflation back to the central bank’s target range of 2.5%-7.5% after the current shocks are dealt with, Ndung’u told the meeting on budget preparation on Thursday (Nov. 11), Reuters reported. The annual inflation rate in Kenya accelerated for the eighth straight month to 9.6% in October. It was the steepest inflation rate since May of 2017.
Knight Frank Research provides strategic advice, consultancy services and forecasting to a wide range of clients worldwide including developers, investors, funding organisations, corporate institutions and the public sector.