There’s growing anxiety among high-end property owners in Nairobi as a wave of expatriate workers—mostly from international NGOs—begin to vacate their homes in posh neighbourhoods like Runda, Muthaiga, Kitisuru, Gigiri, and Lavington.

This mass exit, sparked by the suspension of US foreign aid through the United States Agency for International Development (USAID), is beginning to shake the foundations of Kenya’s elite real estate market.

NGO Cuts Hit Real Estate Hard

The freeze on aid, originally initiated under the Trump administration, is now trickling down to Kenya’s economy in very visible ways. Dozens of US-funded projects across health, education, sanitation, and SME development are either scaling down or shutting operations. In 2023 alone, Kenya received over Sh110 billion ($850 million) in US aid—funding more than 230 projects.

Many of these projects employed thousands of high-income earners, including expatriates who typically rent homes priced upwards of Sh500,000 per month in Nairobi’s upscale zones.

Now, landlords and developers who built or bought properties banking on this elite clientele are being forced to rethink pricing strategies or risk sitting on vacant houses for months.

Rental Market Feeling the Heat

According to property consultancies Knight Frank and Hass Consult, there’s been a noticeable dip in demand for prime rental spaces. Rent asking prices in neighbourhoods like Muthaiga, Nyari, and Kilimani dropped by 4.9%, 4.7%, and 4.6% respectively in Q1 of 2025.

“We’ve seen firms directly financed by USAID ask for rent relief or even vacate office and residential spaces entirely,” said Mark Dunford, MD at Knight Frank Kenya.

“This trend will spill over into the luxury residential segment after a short lag.”

Offices Also Hit as Aid-Linked Projects Scale Down

It’s not just homes. Commercial spaces are also taking a hit. As NGO-affiliated companies downsize or shut down, office space in areas like Upper Hill and Westlands is flooding back into the market, aggravating an already oversupplied segment post-Covid.

How Much Rent Are We Talking?

• 5-bedroom in Runda: ~Sh838,000/month

• 6-bedroom in Loresho Ridge: ~Sh500,000/month

• 5-bedroom in Karen: ~Sh650,000/month

• 6-bedroom in Kitisuru: ~Sh517,000/month

These are the figures being challenged as the tenant base shrinks rapidly.

Prices Set for Correction – But How Deep Will It Go?

According to Chris Ismail of Hass Consult, landlords who used to demand premium rent from expats may now have to settle for more market-reflective pricing.

“If the asking rent was Sh120,000, landlords may now need to accept Sh100,000 or even lower,” he noted.

This could be good news for local high-income earners and diaspora buyers looking to secure property at more reasonable rates.

The Broader Economic Impact

The crisis exposes just how deeply Kenya’s healthcare, education, and NGO sectors are tethered to US funding. In January alone, 2,000 employees from the USAID-backed Ampath-Uzima project were placed on unpaid leave.

If the freeze persists, over 35,000 NGO workers in Kenya could be affected—further reducing demand in both residential and commercial property markets.

Outlook: Opportunity or Oversupply?

While landlords panic, savvy investors could see opportunity. Knight Frank notes that cooling prices in luxury real estate may open the door for new buyers and tenants who were previously priced out.

As one door closes, another may open—but for now, the pressure is squarely on developers, landlords, and agents to adjust or risk major losses.