The value of approved building projects in Nairobi fell sharply to Ksh8.6 billion in January 2025, marking the lowest level in nearly two years, according to data from the Kenya National Bureau of Statistics (KNBS).
This represents a significant decline of 60.1 percent from December’s Ksh21.4 billion, reflecting a slowdown in the construction sector. Experts attribute the drop to reduced demand, delays in approval processes, and uncertainty surrounding new zoning regulations.
The last time construction approvals were this low was in May 2023, signaling a sustained contraction in the sector. In January, residential projects accounted for Ksh6.1 billion, while non-residential developments made up Ksh2.5 billion.
The downturn comes as Kenya’s construction sector recorded two consecutive quarters of contraction in 2024, a trend last seen 22 years ago during the presidency of Daniel Moi. Industry analysts suggest that developers are holding back on new projects due to anticipated lower demand and concerns over zoning policy changes.
Last September, the Architectural Association of Kenya (AAK) raised alarm over delays in project approvals, with some taking over a year to process. “Delayed approvals up to more than one year have led to losses since one cannot start the project on time,” AAK stated.
Meanwhile, Nairobi County is considering new zoning regulations that could allow buildings in the central business district, Upper Hill, and other commercial hubs to rise up to 75 floors. However, the lack of clarity on implementation is causing developers to remain cautious.
In a move to streamline development, the Nairobi County Government recently reduced the building approval timeline from six months to two weeks. Governor Johnson Sakaja, during a meeting with the Kenya Property Developers Association (KPDA), directed that all building approvals be finalized within 14 days.
“By reducing the approval timeline to be done after every two weeks, property developers can expect a more timely and predictable process, allowing them to plan and execute their projects more effectively,” Sakaja stated.
The county hopes that the new measures will address bureaucratic inefficiencies that previously led to long wait times, increased costs, and, in some cases, informal shortcuts that resulted in non-compliant structures.
Nairobi has witnessed several building collapses in recent years due to non-compliance with construction regulations, leading to loss of lives and property. The county government maintains that enforcing structured approval processes will enhance safety and strengthen the construction sector.
With developers remaining cautious and the sector struggling to regain momentum, it remains to be seen whether the expedited approval process and zoning clarity will help revive Nairobi’s construction industry.