Business apartment. [Photo/capitalfm.co.ke]

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A World Bank report says 35 percent of housing supply in Kenya is in the high-end market and 48 percent for the upper-middle-income market yet the highest demand is in the lower middle and low-income segments.

Residential and luxury apartments in Nairobi continue to register the highest increase in prices compared to bungalows and maisonettes.

The Cytonn Weekly Report says apartments across all the lower, upper and middle market segments accounted for 82.7 percent of the total number of units sold in the third quarter of 2017. Maisonettes and bungalows accounted for 10.7 percent and 6.6 percent respectively.

The growth has been attributed to the affordability of apartment units, which on average cost 70 percent of stand-alone houses in Nairobi and the metropolitan areas, says the report. Despite the increase in prices, apartments recorded an average annual uptake of 24 percent compared to detached units which recorded an annual uptake of 23.2 percent in 2017.

Average market price also appreciated by 3.5 percent in 2017 compared to 7.4 percent recorded in 2016. The housing sector has experienced reduced price appreciation due to low credit growth to the private sector and the extended electioneering period.

Apart from that, development of luxury apartments for the upmarket segment of the market in locations such as Kilimani, Riverside, Upper Hill, Westlands, and Kileleshwa, where zoning regulations have been relaxed due to increasing land prices, has also been noted. But the difference is that these developments provide the prestige and exclusivity sought by affluent individuals in the context of highrise residential units.

According to the World Bank, 35 percent of housing supply in Kenya is in the high-end market and another 48 percent in the upper-middle-income market. In contrast, the highest demand is in the lower middle and low-income segments.

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