NAIROBI, KENYA, APRIL 25, 2016 – Githurai ranked as the most affordable mortgage market while Embakasi, Githurai, Komarock and Kariobangi are the most affordable rental markets in Nairobi Metropolis, as per a report released by Cytonn Real Estate. The Nairobi Metropolis Affordability Report is aimed at informing households on the areas that are affordable to purchase homes with mortgages, or rent houses, based on corresponding house prices in areas in the Nairobi metropolis, and their levels of income.
“This research seeks to assist households in making a decision on the best areas to purchase a home using mortgages, or best areas to rent as a tenant”, said Elizabeth Nkukuu, Chief Investment Officer at the launch of the report. “With Kenya’s total number of mortgages at 22,000 compared to a population of 44 million, equating to 2.7% of GDP, Kenya’s mortgage market is still at a very nascent stage compared to more developed housing markets such as South Africa, where mortgages equate to 24% of GDP,” added Elizabeth Nkukuu.
The Affordability Report is constructed as an index, with the key factors under consideration being household income, house prices, locations in Nairobi and the metropolis, and monthly payments for mortgages and rent. The index, which ranks locations within Nairobi metropolis on affordability relative to income, highlighted the opportunity available in satellite towns given their relative cheaper prices, especially for the rental market, given the high interest costs on mortgages.
“Kenya’s real estate sector has been supported by a growing middle class, increased disposable income and infrastructure development. However, much more needs to be done to address the housing deficit of 200,000 units per annum, with an efficiently functioning mortgage market being one of them,” said Johnson Denge, Real Estate Services Manager at Cytonn Real Estate. “We are witnessing an increased number of real estate developments being bought by real estate investors who in turn place them on rent,
with the demand in the economy largely from potential homeowners who cannot finance the high costs of mortgages,” added Johnson Denge.
The report attributes the access to affordable mortgages and rental houses in satellite towns to lower land costs in regions such as Ruai, Athi River. Houses are also more affordable in regions with less modernized houses.
The report ranks Githurai as the most affordable mortgage market requiring a median income between Kshs 25,000- Kshs 50,000 to purchase a house using a mortgage. Areas such as Nyari, Karen, Runda, Muthaiga and Kitsuru are the most unaffordable mortgage markets with households requiring a minimum of Kshs 3.1 Million to purchase a house through mortgage option.
On the rental front, Embakasi, Githurai, Komarock and Kariobangi are the most affordable rental markets in Nairobi Metropolitan area. Households in these areas require a median income of Kshs 25,000 – Kshs 50,000. The most unaffordable rental markets requiring a median income of more thanks Kshs 1,000,000 are Nyari and Rosslyn areas.
The report is available online: NairobI Mortgage and Rental Affordability Report
Table 1.1. Summary Conclusion on Mortgage Affordability
| Summary Conclusion on Mortgage Affordability | |
| Income Bracket (Kshs) | Affordable Towns |
| 25,000 - 50,000 | Githurai |
| 50,000-150,000 | Kariobangi, Athi, Kikuyu, Kitengela, Ruai, Buruburu, Embakasi,Umoja |
| 150,000-300,000 | Ruaka, Lang'ata, Kasarani, Kahawa, Donholm, South B & C, Dagoretti, Rongai, Komarock, Ngong' |
| 300,000- 1,000,000 | Ridgeways, Westlands, Spring Valley, Riverside, Kileleshwa, Kilimani |
| Above 1,000,000 | Nyari, Karen, Runda, Muthaiga, Kitusuru |
| Source: Cytonn Investments | |
Table 1.2. Summary Conclusion on Rental Affordability
| Summary Conclusion on Mortgage Affordability | |
| Income Bracket (Kshs) | Affordable Towns |
| 25,000 - 50,000 | Githurai |
| 50,000-150,000 | Kariobangi, Athi, Kikuyu, Kitengela, Ruai, Buruburu, Embakasi, Umoja |
| 150,000-300,000 | Ruaka, Lang'ata, Kasarani, Kahawa, Donholm, South B & C, Dagoretti, Rongai, Komarock, Ngong' |
| 300,000- 1,000,000 | Ridgeways, Westlands, Spring Valley, Riverside, Kileleshwa, Kilimani |
| Above 1,000,000 | Nyari, Karen, Runda, Muthaiga, Kitusuru |
| Source: Cytonn Investments | |
