The latest Kenya National Bureau of Statistics (KNBS) Residential Property Price Index (RPPI) presents a positive headline for Kenya's residential market. Average residential property prices increased by 4.8% between the first quarter of 2025 and the first quarter of 2026. However, beneath that overall figure lies a much more significant market development. Our analysis suggests that Kenya's residential property market is becoming increasingly segmented, with standalone houses and apartments following distinctly different price trajectories.
Looking beyond the headline
At first glance, a 4.8% annual increase suggests a healthy residential market. Quarter-on-quarter, prices also recorded modest growth of 0.6%, indicating that the market continues to expand, albeit at a measured pace. However, the aggregate index conceals important differences between residential property categories. Understanding these differences is essential for developers, investors and homebuyers alike.
Two housing markets emerging
The strongest finding from the report is the widening divergence between standalone houses and apartments. Standalone house prices increased by 8.5% year-on-year, reflecting continued demand for detached residential properties. By contrast, apartment prices declined by 3.0% over the same period. This divergence suggests that residential performance is increasingly being determined by property type rather than by the market as a whole. For investors, this marks an important shift. The residential sector should no longer be viewed as a single homogeneous asset class.
Buyer preferences continue to evolve
The sustained appreciation of standalone homes indicates continued demand for larger residential units offering greater privacy, flexibility and lifestyle appeal. Although remote working patterns have evolved since the pandemic, many households continue to place value on larger living spaces and suburban environments. This structural demand continues to support pricing within the standalone housing segment.
Apartment performance is becoming more selective
The report also highlights important geographical differences within the apartment market. Apartment indices declined in Nairobi's Upper and Middle residential segments, while apartments in other Nairobi areas and other regions recorded price improvements. This suggests that apartment demand has not disappeared. Rather, it has become increasingly selective. Location, affordability, accessibility and local supply dynamics are becoming stronger determinants of investment performance.
Implications for investors
The findings reinforce the importance of market segmentation when evaluating residential investment opportunities. Investors should increasingly assess:
- Property type;
- Target buyer profile;
- Geographic location;
- Local supply pipeline;
- Affordability dynamics; and
- Long-term demographic trends.
Broad assumptions about residential property appreciation are becoming less reliable. Future performance is likely to vary significantly across market segments.
What this means for developers
For developers, the report underscores the importance of aligning product offerings with changing market preferences. Projects designed around demonstrated demand rather than historical assumptions are likely to perform better. Standalone housing continues to demonstrate resilience, while apartment developments require more careful market positioning, pricing strategies and location analysis.
Our View
At Stable Merchants, we believe the latest KNBS Residential Property Price Index marks another step in the evolution of Kenya's residential market. The key takeaway is not simply that residential prices increased by 4.8%. The more significant finding is that Kenya's housing market is becoming increasingly differentiated. Standalone houses continue to demonstrate robust price growth, while apartment performance is becoming more dependent on location and local market fundamentals.
For investors, the question is no longer whether residential property remains an attractive asset class. The more important question is which residential segment offers the strongest long-term investment opportunity. As Kenya's property market matures, investment success will increasingly depend on selecting the right segment rather than relying on overall market trends.
Stable Merchants Limited
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