Why Kenya Is Popular For Wealthy Individuals Seeking To Buy New Homes- Report

For the second year running, High Net-Worth Individuals (HNWI) around the world are turning towards Kenya as a first choice for new home purchases, more than developed nations such as Canada and the United Kingdom (UK).

This is according to the 2024 Wealth Report by real estate firm Knight Frank, a report which was based on responses from private bankers and wealth advisors.

The country's emergence as a safe haven for the wealthiest investors, as the country’s growth lures funds back home amid world turmoil and post-COVID-19 slowdowns, is seeing 33 per cent of respondents preferring Kenya as a choice for HNWIs looking to own a home for the very first time.

Canada followed closely at 21 per cent, positioning itself as the second most favoured destination. The UK secured the third spot with a 20 per cent preference rate.

Mark Dunford, CEO of Knight Frank Kenya and Boniface Abudho of Africa Research Analyst. /KNIGHT FRANK

Last year, 60 per cent of respondents indicated their preference to purchase homes in Kenya, with 50 per cent choosing the UK, 40 per cent in the United States (US), 25 per cent in Canada and 20 per cent in South Africa and Australia respectively.

Kenya in 2024 was also seen as a top preference in terms of a second choice for homeowners, though it shared the leading position with South Africa and the UK, garnering 14.5% of respondents’ preferences for a second home purchase.

For a third choice, Kenya came second to the UK, with the British region claiming the top spot as the preferred destination for a third home purchase, commanding a 25% preference. 

"Kenya also maintained a strong presence in the third option, securing the second position with a 16% preference rate. Germany emerged as a distant third choice, capturing 8% of respondents’ preferences," the report read in part.

The majority of respondents identified investment as the primary motivation behind their clients’ future home purchases.

This strategic choice highlights a deliberate effort among HNWIs to view residential real estate as a lifestyle asset and a robust investment vehicle.

Factors Driving Investment Motivation In 2024

1. Wealth Appreciation: High-net-worth individuals often view real estate as a tangible asset with the potential for long-term appreciation. Residential properties, particularly, are perceived as secure investments that can yield substantial long-term returns.
2. Diversification of Investments: Real estate allows HNWIs to diversify their investment portfolios. By allocating funds to residential properties, they can balance their wealth across different asset classes, reducing risk and enhancing overall financial stability.
3. Income Generation: The prospect of rental income contributes significantly to the investment motivation. Many HNWIs recognize the potential to generate consistent returns by renting out their properties, creating an additional income stream.
4. Legacy and Inheritance Planning: High-net-worth individuals often prioritize the creation of a lasting legacy. Real estate is an enduring asset passed down through generations, aligning with long-term family wealth strategies.

“Kenya’s growth is bringing a resurgence in HNWIs buying Kenyan property. This includes second and third homes in addition to their commercial property investments. Wealthy investors have also taken a step back from foreign assets in favour of building bigger positions at home,” said Mark Dunford, CEO of Knight Frank Kenya.

The survey found that HNWIs are now holding about 60 per cent of their wealth in homes, with just under 30 per cent buying a home in 2023 and around the same percentage planning to buy another home in 2024.

This has already brought a shift in the balance of ownership, with about 10 per cent of Kenyan HNWIs now owning homes abroad, down from 14 per cent at the beginning of 2023.