Cheaper Credit Unlocks Kenya’s Construction Sector Growth
Kenya’s construction industry is riding on cheaper credit and stronger developer financing, with fresh data showing a sharp rebound..
✨ Key Highlights
Kenya’s construction sector is experiencing a significant boom, driven by easier access to credit and robust developer financing, leading to a sharp rebound in building activity and surging property demand. The industry expanded by 5.7% in the second quarter of 2025, reversing a 3.7% contraction in the same period of 2024.
- Credit extended to enterprises in the construction sector grew by 21.7%, reaching KSh 159.6 billion by June 2025.
- The Central Bank of Kenya cut its base lending rate from 13.00% in June 2024 to 9.75% in June 2025, then to 9.50% in August.
- The HassConsult Q2 2025 Property Price Indices showed Nairobi property sales prices rose 3.75% in the three months to June, with detached homes seeing their fastest quarterly gain in nine years.
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Kenya's Economy Grew 5.0% in Q2 2025 Amid Widening Trade Deficit - October 2025
Kenya’s economy grew by 5.0% in the second quarter of 2025, outstripping the 4.6% growth in the same period last year. This expansion was primarily driven by strong performances in the agriculture and services sectors, alongside a recovery in construction. The construction sector experienced a significant boom, expanding by 5.7% and reversing a 3.7% contraction in the same period of 2024, driven by easier access to credit. Despite this growth, Kenya's current account deficit significantly widened to KSh 83.7 billion in the second quarter of 2025. This marked a 76.6% increase from the previous year, an expansion primarily driven by a larger merchandise trade deficit as exports declined and imports grew.
