Nairobi saw prices of its luxury residential properties rise by an average of 8.3 percent last year, marking one of the biggest gains among global cities covered by real estate firms Knight Frank and Douglas Elliman.
Kenya’s capital was ranked 12 in the list, rising from 52 in 2023 when its luxury properties registered a price jump of 2.5 percent.
Nairobi trailed Mexico, Aspen and Mustique last year when the rival cities posted price gains of 8.9 percent, 8.9 percent and 8.8 percent respectively.
The top gainer was Seoul at 18.4 percent, followed by Manila (17.9 percent), and Dubai (16.9 percent). Doha was ranked at the bottom, with prices of its prime properties contracting by 9.6 percent last year.
The ranking is based on the Knight Frank Prime International Residential Index which tracks movements in luxury prices across the world’s top residential markets.
The index, compiled using data from Knight Frank’s research teams around the world, covers major financial centres, gateway cities and second-home hotspots –both coastal and rural– as well as leading luxury ski resorts.
The prime properties covered are the most desirable and most expensive units in a given location, generally defined as the top five percent of each market by value.
The real estate firm says such houses are often bought by international investors. In Nairobi, the prime properties are concentrated in Muthaiga, Karen, Runda, Rosslyn and Gigiri where some units can sell for hundreds of millions of shillings.
Buyers of the luxury homes have a net worth in millions of US dollars. Knight Frank said the decline in interest rates has helped boost demand and prices for luxury real estate.
“With global interest rates edging lower over the past 12 months, prime residential price growth started to tick higher in 2024. Our unique Prime International Residential Index confirms the big themes across the world’s 100 leading luxury city, sun and ski destinations,” the 2025 Wealth Report by Knight Frank and Douglas Elliman says.
Major economies including the United States and Europe –where the wealthy are concentrated— reduced their interest rates from the second half of last year.
Knight Frank lists the main reasons why the rich buy prime properties as family use and legacy at 44 percent, capital preservation (29 percent), and diversification (20 percent), with potential rental income coming in last at seven percent.
Wealthy households typically diversify their wealth across various asset classes including real estate, businesses, stocks, fixed income instruments like bonds, cash and commodities.
