Nairobi construction sector slows as building approvals drop

The construction sector in Nairobi is facing a slowdown, with the number of approved buildings dropping sharply.

Data from the Kenya National Bureau of Statistics (KNBS) shows that the value of approvals plummeted to Sh8.6 billion in January 2025, marking the lowest figure in nearly two years.

This represents a 60.1 per cent decline from December’s Sh21.4 billion, highlighting challenges in the sector.

Experts attribute the decline to reduced demand, slow approval processes, and uncertainty over new zoning regulations.

The last time approvals were this low was in May 2023, suggesting a sustained contraction in the industry.

Residential projects made up Sh6.1 billion of the approvals in January, while non-residential developments accounted for Sh2.5 billion.

The downturn comes amid a broader slowdown in Kenya’s construction sector, which experienced two consecutive quarters of contraction last year.

This trend has not been observed in over two decades, dating back to the administration of former President Daniel Moi.

Industry analysts believe that developers are hesitant to initiate new projects due to concerns over future demand.

Additionally, ambiguity surrounding Nairobi’s proposed zoning policy has further contributed to the sector's slowdown.

In September last year, the Architectural Association of Kenya (AAK) raised concerns over approval delays, which have significantly affected project initiation.

"Delayed approvals up to more than one year have led to losses since one cannot start the project on time," the association said.

Nairobi County is currently considering a zoning policy that would allow buildings in areas such as the central business district and Upper Hill to rise as high as 75 floors.

However, uncertainty over the policy has made developers cautious about committing to new projects.

To address these concerns, the Nairobi County Government recently reduced the building approval timeline from six months to two weeks.

This move aims to eliminate bureaucratic delays that have long hampered the sector’s growth.

For years, inefficiencies in the approval process forced developers to endure long waiting times and increased costs.

In some cases, developers resorted to informal methods to expedite approvals, leading to unsafe and non-compliant structures.

During a meeting with the Kenya Property Developers Association (KPDA) at City Hall, Nairobi Governor Johnson Sakaja announced that all building approvals would now be processed 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 initiative aims to streamline operations in the construction sector by promoting compliance with safety regulations while reducing unnecessary delays.

Nairobi has recorded several building collapses due to non-compliance with construction standards, leading to loss of lives and property.

Governor Sakaja emphasized that enforcing a structured approval process would not only improve efficiency but also ensure that developers adhere to safety requirements, ultimately strengthening the construction industry.