Skip to main content
× THE NAIROBIAN POLITICS TEN THINGS ASIAN ARENA TRAVEL FEATURES NAIROBIAN SHOP MONEY FASHION FLASH BACK HEALTH UNCLE TED BETTING Podcasts E-Paper Lifestyle & Entertainment Nairobian Entertainment Eve Woman Travelog TV Stations KTN Home KTN News BTV KTN Farmers TV Radio Stations Radio Maisha Spice FM Vybez Radio Enterprise VAS E-Learning Digger Classified Jobs Games Crosswords Sudoku The Standard Group Corporate Contact Us Rate Card Vacancies DCX O.M Portal Corporate Email RMS

Why majority of Nairobians choose to rent instead of buy dream homes

By Harold Ayodo | April 7th 2021

It is an open secret that majority of Nairobians and residents of major urban areas countrywide are not home owners. Recent statistics from the Kenya National Bureau of Statistics (KNBS) paint employed Nairobians as ‘career’ tenants with 86.4 per cent of households live in rented houses.

Nairobians can argue that they are not alone as 82.2 per cent of households in Mombasa are tenants. Others are Kajiado (59.5 per cent), Kiambu (51.6 per cent), Nakuru (46.3 per cent), Uasin Gishu (44 per cent) and Kisumu (42.2 per cent).

Nairobians are generally hard workers who take their daily hustles seriously. However, several insurmountable hurdles have ensured home ownership remains a pipe dream to many.

High property prices

For instance, high property prices have ensured that many Nairobians remain tenants and live from hand to mouth. Majority cannot also afford mortgages over the high interest rates and the initial deposit required to access mortgage.

There are also many Nairobians who hustle in the informal sector and may afford houses, but do not, due to lack of credit risk information.

Lack of real estate finance

There are also other factors that have kept Nairobians from owning homes like lack of real estate finance to fund large-scale affordable developments and low-income levels which has made it hard to service loans.

Recently, Central Bank of Kenya (CBK) Governor Patrick Njoroge said that 99.3 per cent of bank accounts countrywide have deposits of less than one million shillings. Conversely, this equates to approximately 350,000 Kenyans only who have over a million shillings in bank savings – how can more Nairobians be home owners?

According to a recent wage distribution data by the KNBS, three-quarters of all Kenyans working in the formal sector are on a monthly salary of below Sh50,000.

The data indicates that the number of people in the typical Kenyan employee, who is paid between Sh20,000 and Sh29,999 per month, stood at 964,943 or 36 per cent of the 2.6 million salaried workers three years ago.

Therefore, home ownership in urban areas countrywide stands at 21.3 percent implying that more than 78.7 per cent of the urban population are renters, compared to South Africa which has over 53 per cent of its urban population owning homes.

Hosuing deficit

According to figures from the National Housing Corporation (NHC), Kenya has a housing deficit of two million units which grows by 200,000 units annually.

Real estate pundits attribute the current runaway housing deficit to inadequate supply over the fragmented nature of the sector, high development and land costs.

Other factors include the perpetual focus on high end markets due to lack of profitability at the lower end of the market and inordinate delays in issuing building approvals in Nairobi, Kisumu and Mombasa counties.

-Harold Ayodo is an Advocate of the High Court of Kenya


Share this story
Hide your knickers
Hanging your underwear on a public clothesline makes them public property
Governor Obado: I won’t vie for MP seat, it is like kalongo longo in my village
He said the MP seat is a lesser political position compared to his current post of county chief executive.