Changes in the application process for foreigners wishing to work in Kenya to have a work permit approved and issued before they can travel to take up their assignment in the country has had a negative impact on the real estate sector.
This change in the law “Triggered a new uptick in international departures, which by the first quarter of 2019 had resulted in significant falls in the sales prices and rents of top-end detached houses, which fell by 4.4% and 4% respectively in the first 12 weeks of the year,” said Sakina Hassanali, Head of Development, Consulting and Research at Hass Consult.
Sakina says besides Nairobi, Kenya’s capital being positioned as one of the four ‘poles’ of Africa, as a centre of diplomatic and commercial activity; has brought in an abundance of diplomatic staff, and donor-funded staffing, as well as pools of social entrepreneurs and business adventurers.
“However, in filling Nairobi’s many top-end estates, the flight of international residents is now being felt. There has been a steady downgrading of diplomatic and donor-funded postings since the world financial crisis of 2008, with many western governments running austerity programmes to cover the debt funding for their support of the financial system at that time.”
She says, the residential property index has witnessed strongest changes at the very top of the market, and at the lower end, in apartment sales and rentals in the first quarter of 2019.
“We foresee some continued downwards pressure in this segment until the international economy improves or Kenya initiates policies to attract renewed growth in international residency,” said Sakina while releasing the Hass Consult Residential Price Index and Land Price Index results for Quarter One 2019.
“However, while the top end of the market has been affected by global trends and domestic policies, the other strong mover has come in apartment rentals,” she added.
Initially, foreigners could make a work permit application and the employee was allowed to travel to Kenya, and work (through a special pass) as their work permit was being processed.
However, the 2018 new process requires an employer to put in the application on behalf of the employee, while the employee is in their home country, through their Kenyan office and submits it to immigration for processing.
Once the application has been processed, approved and the work permit issued, then the employee can travel to Kenya to take up their position.