High-income tenants, especially those working with NGOs, are leaving some of Nairobi’s most affluent neighborhoods—ringing alarm bells for landlords and developers in the city’s prime real estate market. This is after USAID funding was reduced following changes in aid policy by former US President Donald Trump.

Expatriates Exit: The Ripple Effect of US Aid Freeze

The US government’s decision to stop funding through the United States Agency for International Development (USAID) is now affecting Kenya’s rental property market—especially in areas popular with foreign aid workers.

Well-known estate agencies like Knight Frank and Hass Consult are reporting a slowdown in the luxury rental segment across Nairobi suburbs like Runda, Muthaiga, Kitisuru, Lavington, and Gigiri. These areas have long been favorite with expatriates working with aid organizations.

High-End Rentals and Offices Affected

With hundreds of aid workers facing job uncertainty or returning home, landlords in upmarket areas are feeling the heat. Vacancies are increasing not only in high-end residences but also in commercial offices tied to NGOs and their partner organizations.

Even local staff employed under US-funded projects are downsizing. Many are moving out of expensive rental units to more affordable homes as organizations are asking for rent deferrals or office space reductions to survive the cash crunch.

The Scope of Aid: More Than Just Salaries

In 2023, Kenya received $850 million (approximately Sh110 billion) in US aid—funding over 230 projects. These included healthcare, education, and water sanitation to drought relief and hospitality training for orphans.

Aid doesn’t just support salaries—it supports everything from small health clinics to start-up incubators. Now as funding dries up, the financial ecosystem around these projects is taking a hit.

Prices Drop in Nairobi’s Leafy Suburbs

The first quarter of the year is already showing signs of distress in the high-end rental market:

  • Muthaiga: Prices down 4.9%

  • Nyari: Down 4.7%

  • Kilimani: Down 4.6%

  • Other affected suburbs include Gigiri, Loresho, Ridgeways, Runda, and Westlands. This is a sign of decreasing demand, especially from expatriates who used to make up a significant number of tenants in these high-end estates.

What the Experts Say

According to Knight Frank’s Managing Director Mark Dunford, many organizations funded by USAID are downsizing or leaving the country altogether.

“It’s not just the big names. Many smaller organizations that rely on aid—either directly or indirectly—are also feeling the pain,” said Mr. Dunford. “They’re laying off staff, reducing office space and asking for rent relief.”

Hass Consult’s Sakina Hassanali says landlords are now facing decreasing demand and lower asking prices especially in Nairobi’s most affluent areas.

Real Estate Listings: Luxury Homes Taking a Hit

Some examples of current rental listings illustrate the scale of the prime market:

  • A five-bedroom home in Runda: Sh838,563/month

  • A six-bedroom house in Loresho Ridge: Sh500,000/month

  • A five-bedroom house in Karen: Sh650,000/month

  • A six-bedroom residence in Kitisuru: Sh517,440 ($4,000)

These properties, once easily snapped up by well-paid expats, are now struggling to find tenants.

Office Space Oversupply Deepens

The commercial property sector is not spared either. Office vacancies are rising, adding to the existing oversupply that began during the COVID-19 pandemic. Start-ups, health centers, and education projects that depended on US aid are either scaling back or shutting down.

Moderate Dip Expected in Property Sales

Interestingly, while rentals are taking a beating, property sales are expected to see only a moderate dip. That’s because most property buyers in Kenya are still locals or members of the diaspora—groups less affected by USAID job cuts.

Adjusting to the New Normal: Market Correction Ahead?

According to Chris Ismail, a property expert at Hass Consult, landlords are likely to adjust asking prices to meet current demand.

“Landlords typically inflate rent prices for expats. With many of them gone, we’re seeing a market correction. What used to rent at Sh120,000 could now go for Sh100,000,” said Mr. Ismail.

While this isn't great news for landlords, tenants and buyers might benefit from better deals in the coming months.

“The dip in pricing could actually be good for locals looking to move into better housing at more reasonable rates,” added Mr. Dunford.