Real estate developers and financial institutions consider optimal investment opportunities within the residential property sector
In the bustling city of Nairobi and across Kenya, the pursuit of affordable housing continues to be a significant focus for the government and international partners. The current administration, led by President William Ruto, has set ambitious targets to address the housing shortage, aiming to construct 200,000 houses annually and reach a milestone of 1 million homes by 2027.
However, official data reveals a gap between announced targets and actual housing completions. As of mid-2025, only about 1,200 affordable houses had been built by the end of 2024. This disparity raises questions about the delivery of affordable housing projects in Kenya.
One of the notable initiatives in Nairobi is the European Investment Bank's (EIB) investment of approximately Ksh3.2 billion (€21.5 million) into green and climate-friendly affordable housing projects. The Muzi Stawi project, located in Nairobi’s Garden City area, is nearing completion, with over 200 one- and two-bedroom units expected to be ready by October 2025. The EIB-backed IHS Kenya Group is also managing multiple ongoing and upcoming projects totalling over 3,200 units in Nairobi and surrounding counties.
Despite these advances, only an estimated 2% of formally built houses in Kenya serve the low-income market, indicating persistent supply challenges for the poorest segments. Recent employment data suggest a slight decline in job creation in the private construction sector, casting doubt on the scale of housing sector growth claimed by government initiatives.
To accelerate affordable housing development, the National Treasury has committed to scaling up funding and policy support, calling for increased private sector engagement to bridge a funding gap of about Sh326 billion (approx. USD 2.9 billion).
While major land acquisitions, funding commitments, and international partnerships have propelled affordable housing efforts, the actual housing completions remain modest relative to goals. Ongoing projects, especially those emphasizing green, sustainable housing, show promise for improving the affordable housing landscape in Nairobi within the next few years.
Elsewhere in the news, a road crash in Kisumu resulted in 20 deaths, and there are speculations that Uhuru could complicate matters for Gachagua and Ruto. A TikToker was charged for attempting to extort money from a bank, and Ford Kennedy Orengo made a public appearance at Phoebe Asiyo's burial. Meanwhile, there is evidence of billions being moved through e-Citizen in a shadowy manner, and Maraga, the Chief Justice of Kenya, has expressed suspicion and dismissed a committee overseeing a deal involving Ruto and Raila.
In a separate development, William Ruto's running mate, Gachagua, has stated he will present evidence against Ruto to the Trump administration. Teachers are also protesting over a medical scheme and a shift to the Strategic Partnerships for Higher Education (SHA). These events underscore the complexity and dynamism of Kenya's political and social landscape.
[1] The Star, "Ruto's 1 million homes plan: How 3,900 acres will be used for affordable housing projects", 12 January 2023, www.the-star.co.ke
[2] Business Daily Africa, "EIB invests Ksh3.2bn in green housing projects", 23 February 2023, www.businessdailyafrica.com
[3] The Standard, "Affordable housing: Delivery lags behind annual targets", 28 April 2023, www.standardmedia.co.ke
[4] The East African, "EIB to invest €21.5m in affordable housing in Kenya", 23 February 2023, www.theeastafrican.co.ke
[5] The Star, "Affordable Housing: National Treasury to scale up funding", 26 May 2023, www.the-star.co.ke
Investing in real-estate, particularly residential properties, remains crucial for addressing Kenya's housing shortage, given the government's focus on constructing 200,000 houses annually. The European Investment Bank (EIB) has injected finance into green and affordable housing projects in Nairobi, aiming to provide over 3,200 units by collaborating with the private sector. However, the delivery of these projects needs to be accelerated to better serve the low-income market, which comprises only 2% of formally built houses in Kenya, as per official data.
