Kenya’s coastal land market is experiencing significant growth driven by tourism, lifestyle, migration and changing work patterns, according to a new Coastal Land Price Index launched by HassConsult.

Speaking in Nairobi on during the launch, HassConsult Co-CEO Sakina Hassanali said the Index is designed to provide deeper insights into a market that has increasingly diverged from traditional inland property trends.

Hassanali said that the firm has been collecting real estate data for over 15 years in 12 coastal areas in Kenya. She explained that, while urban land prices typically respond to economic indicators such as job growth, business expansion and industrial output, coastal land behaves differently due to its limited availability and unique demand drivers.

“Coastal land behaves very differently,” she explained. “It is like a high-pressure cooker, where demand is intensified by scarcity.”

According to the report, prime coastal land that is defined as land within one kilometre of the beachfront, covers approximately 536 square kilometres. However, about 30 per cent of this land is unavailable for development due to natural features such as mangrove forests, sand dunes and river deltas, leaving just over 375 square kilometres of usable space.

“This alone creates pressure on prices that is greater than on inland plots,” Hassanali noted.

The index reveals that coastal land prices have risen sharply in recent years, particularly following the Covid-19 pandemic in 2020, which triggered shifts in lifestyle and investment patterns.

Hassanali pointed out that tourism remains a key driver of demand.

“Long-term, about a third of tourists who holiday in and fall in love with an area develop dreams of owning a home there,” she said. “A significant percentage of those then go ahead and actually buy.”

Kenya’s coast continues to attract millions of visitors annually, with repeat tourism playing a major role. Around 80 per cent of the five million visitors to the coast last year had visited before, while each year brings about another one million new visitors,” she added, noting that this creates a steady pipeline of potential property buyers.

In addition to tourism, retirement migration has emerged as a major factor influencing coastal land demand. With global life expectancy increasing and more people reaching retirement age, many are opting to relocate from urban settlements to scenic coastal regions.

“Globally, up to two-thirds of retirees who have lived in cities relocate to coastal areas,” Hassanali said, describing coastal land as “the single top magnet for relocation retirees.”

The rise of remote working has further accelerated this trend. While many workers have returned to offices post-pandemic, a significant number continue to work from home, giving them greater flexibility in choosing where to live.

“For these professionals, choices about where to live have become much wider and much more driven by lifestyle than commercial necessity,” she explained.

This convergence of factors has led to what Hassanali described as “a further flow of coastal incomers and investors,” resulting in steep price increases across several coastal towns.

The report highlights notable variations in land price growth across different locations. Some towns have recorded increases of up to 70 per cent over the past five years while others have seen more modest growth of around 24 per cent.

“It all makes for strong investment returns on capital appreciation,” Hassanali said. “But from different base prices and different growth rates, the actual investment equations are very different town by town.”

She cautioned, however, that past performance should not be taken as a guaranteed indicator of future returns.

“Past growth doesn’t absolutely determine future growth,” she said, emphasising the importance of monitoring quarterly and annual trends.

The report identifies areas such as Nyali, where price growth remains steady, but is beginning to slow, and Bamburi, where prices have surged but are now showing signs of flattening.

Hassanali also noted that land prices are influenced by factors such as access, infrastructure and land title issues. Improvements in these areas have, in some cases, triggered new waves of price growth. Despite these variables, she stressed that the overarching driver of demand remains the natural appeal of Kenya’s coastline.

“The top driver has been natural beauty,” she said.

The report further highlights top performing areas that include Diani Beach and Watamu, both internationally recognised coastal destinations.

Diani Beach was recently ranked the third-best beach in Africa by TripAdvisor Travellers’ Choice Awards and one of the top 25 in the world, while Watamu has also earned recognition as one of Africa’s leading beach destinations.

“These two beach areas, along with Lamu and Bamburi, have delivered by far the fastest land price growth since the pandemic,” Hassanali stated.

Other areas, such as Kilifi, have lagged behind due to challenges related to access and infrastructure but are now beginning to recover and show stronger growth potential.

“In sum, there has never been this level of data available for coastal investors,” Hassanali said, adding that the new index aims to support informed decision-making among investors, planners and businesses.

“We hope it will be useful to regional planners, to businesses and to every investor who has dreamed of owning a place at the coast,” she concluded.

Coastal Land Price Index is expected to serve as a key reference point for stakeholders seeking to navigate the evolving dynamics of Kenya’s coastal property market.

• A Tell Media / KNA report / By Catherine Odoyo and Molvin Laventa