The real estate market in Kenya as of December 2025 reflects a period of cautious stabilization, with various segments responding differently to economic pressures, changing buyer preferences, and evolving development strategies. While demand in certain areas is showing signs of recovery, the overall market continues to adjust to affordability challenges, higher construction costs, and a more selective buyer base. In major urban centres, interest in residential property is slowly rebounding, but it is driven primarily by middle income and upper middle income earners who prefer apartments, mixed use units, and gated communities rather than standalone homes. This shift in demand is influenced by changing lifestyles, security considerations, and rising land prices that make compact housing more practical for many working professionals. Developers have adapted by prioritising smaller units, flexible payment plans and value-added amenities to appeal to the modern homebuyer who seeks convenience and affordability without compromising safety and accessibility.
Commercial property, on the other hand, continues to evolve in response to the long term structural shifts that took place over the past few years. Office spaces still face uneven uptake as many companies maintain hybrid work models, prompting developers to offer more flexible lease terms and shared workspaces. Retail spaces in high-traffic areas are performing relatively better, especially where anchor tenants draw consistent foot traffic, but vacancy rates remain a concern in less strategic locations. These patterns indicate a market still finding its balance as businesses refine their operational models.
Outside major cities, interest in land remains strong. Peri urban and satellite towns continue to attract buyers seeking long-term value, lower land prices and opportunities for future development. Improved infrastructure projects, such as road upgrades and new bypasses, have made these areas more appealing for both settlement and speculative investment. However, challenges such as land title verification, rising construction material costs and cautious lending behaviour by banks continue to influence purchasing decisions.
In response to these market dynamics, many potential buyers and investors are opting for financial tools that allow them to preserve liquidity while monitoring property trends. With economic uncertainties still present, safe and flexible investment options offer a buffer while individuals plan for long term property ownership.
If you are planning for a future real estate investment and want to grow your savings safely in the meantime, consider the Cytonn Money Market Fund (CMMF) a flexible and transparent way to build your financial foundation while keeping your capital liquid.
Call +254 (0) 709 101 200 or email sales@cytonn.com to get started.
