Oct 5, 2025

1. Industry Report

During the quarter, the following industry reports were released, and the key take-outs were as follows;

1. GDP report Q2’2025

During the week, the Kenya National Bureau of Statistics (KNBS) released the Quarterly Gross Domestic Product Report that outlined the performance of various sectors to the GDP and below are the key take-outs related to the Real Estate sector:

1. Steady growth in the Real Estate Sector - The Real Estate sector posted steady growth of 5.5% in Q2’2025, which is 0.4% points slower than the 5.9% growth registered in Q2’2024. The steady growth can be attributable to an increasing demand for housing in the country. However, the slowed growth compared to Q2’2024 can be attributable to the sustained increase in the construction costs which remained a significant challenge to developers and investors during the period under review. For instance, the construction costs of a standard high-rise apartment block have increased by 13.0% to Kshs. 68,290 per square metre in 2025 from Kshs. 60,435 per square metre in 2024. On a quarter-on-quarter basis, this represented a 0.2%-points increase from the 5.3% growth recorded in Q1’2025. The increase in performance can be attributable to; i) Eased interest rates, following CBK’S decision to lower the CBR by 1.0% point to 9.75% from 10.00%. This has enabled increased access to credit and lower rates which has spurred demand in the property market, ii) Improved strength in the Kenyan Shilling, which has improved against major currencies such as the Euro, Pound Sterling and US Dollar by 16.3%, 14.2% and 13.6%. This will help in reducing the expected importation costs for construction costs for materials such as furniture, fixtures and fittings, iii) Favourable government and policy interventions. Continued rollout of affordable housing projects under the Kenya Kwanza administration (BETA) has fostered increased demand for residential units and construction related services.

The graphs below show the Real Estate sector contribution to GDP from Q1’2021 to Q2’2025.