Diani, Watamu lead sharp rise in coastal land prices - Report

New data from HassConsult shows some coastal towns have recorded price growth of more than 70 percent since the COVID-19 pandemic, as investors and home buyers shift focus to areas offering natural beauty, beachfront access and leisure living.

The country’s coastal property market is increasingly charting its own path, separate from the wider economy.

According to the Hass Coastal Land Price Index for the last quarter of 2025, demand for land at the coast is now being driven less by traditional business activity and more by tourists, retirees, diaspora buyers and remote workers seeking lifestyle destinations.

"About a third of tourists who holiday in and fall in love with an area develop dreams of one day having their own homes there. A significant percentage of those then go ahead and actually buy and move or sometimes run those second homes as holiday homes," said Farhana Hassanali.

The report shows Diani recorded the highest growth in land prices since 2020, with prices rising by 79 percent over the five years.

Watamu followed with a 70 percent increase, while Lamu and Bamburi posted gains of 60 percent and 56 percent respectively.

Hass Consult stated areas with wider beaches, strong tourism appeal and scenic value have seen the strongest demand.

"The most valuable coastal land is within one kilometre of the beachfront, which would limit it to around 536 square kilometres of land if we used it all. But around 30 per cent of that coastal strip is excluded from development by natural or protected features, from mangrove swamps and sand dunes to river deltas, reducing our prime coastal land asset to little more than 375 square kilometres," stated Farhana Hassanali.

This scarcity of land has pushed up prices, especially in premium beach destinations. Nyali remains the most expensive coastal market by average land value, with an acre going for about Ksh.114 million, compared to Ksh.91.3 million in Mombasa.

However, growth there has slowed as investor interest shifts toward less developed but more scenic destinations such as Diani, Watamu and Lamu.

Meanwhile, Kilifi Town recorded one of the strongest annual increases in 2025, while Mombasa City saw prices decline slightly over the year.

Industry players say government support through infrastructure such as roads and other basic services, together with a predictable and more efficient issuance of title deeds, could help unlock investment and restore confidence in the real estate sector in the coastal region.