NAIROBI, Kenya, July 2 – Kenya’s property developers are reassessing investment decisions as shifting government policies, tighter financing conditions and changes introduced under the Finance Act 2026 make it more difficult to commit capital to long-term projects.
Industry players say frequent regulatory changes have created uncertainty in a sector where developments often take years to complete, forcing investors and financiers to review project assumptions before breaking ground.
Kenya Property Developers Association (KPDA) Chairman Ken Luusa said the biggest challenge facing the industry is no longer just demand, but the unpredictability of the policy environment.
“Kenya has recorded some of the strongest residential growth globally, yet very few people would describe the past few months as straightforward,” Luusa said.
“The story is therefore not one of a uniformly rising or falling market, but rather one that has become increasingly fragmented.”
He noted that while some satellite towns continue to attract new developments, demand has slowed in more established residential markets, making it necessary for developers to adopt more targeted investment strategies.
According to Luusa, the implementation of the Finance Act 2026 has prompted many developers to reassess project financing and feasibility, with investors becoming increasingly selective about where they deploy capital.
KPMG East Africa Associate Director for Tax and Regulatory Services Lydia Abala said the Finance Act signals a broader shift towards improving tax administration and compliance rather than introducing new taxes.
“This Act gives us an opportunity to pause and ask ourselves those questions. It keeps coming back to the cost of development — has the risk profile of the industry changed?” she said.
“It’s not only around the additional cost of doing business, but there may also be opportunities that only the people who move faster than the rest will take advantage of.”
Abala said developers should prepare for a more data-driven tax environment as the Kenya Revenue Authority strengthens digital compliance systems, making proper documentation and continuous tax compliance increasingly important throughout the life cycle of property projects.
Industry players say greater policy certainty and a predictable regulatory environment will be critical in sustaining private investment as Kenya seeks to meet growing demand for housing and urban development. They warn that prolonged uncertainty could delay projects and slow capital flows into the real estate sector.
