Consumer-durable loans overtake property credit at Kenyan banks
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Bank lending for cars, appliances and electronics has passed Sh500 billion and moved ahead of real estate credit for the first time, CBK data shows, as lenders turn more cautious on property.
Bank lending for cars, appliances, electronics, furniture and other consumer durables has overtaken property financing in Kenya for the first time, marking a shift in borrowing patterns as lenders become more cautious about real estate.
Credit for consumer durables crossed Sh500 billion to reach Sh502.2 billion in June 2026, which is Sh44.7 billion or 9.8 percent more than a year earlier, according to the latest banking industry data. The stock of loans for motor vehicles, household appliances, furniture, electronics and computing equipment was Sh56.3 billion higher than real estate credit, after lending to real estate fell by Sh6.1 billion to Sh445.9 billion over the same period.
The crossover reverses the position in June 2018, when banks held Sh373.7 billion in real estate loans against only Sh181.4 billion for consumer durables. Consumer-durable credit has since climbed 176.9 percent, while real estate lending has grown by just 19.3 percent.
Real estate credit has entered contraction, falling 1.35 percent in the year to June 2026 in the first annual decline since June 2021. Annual growth had slowed from 32.4 percent in June 2022 to 3.67 percent in 2023, 3.61 percent in 2024 and 1.64 percent in 2025.
The Central Bank of Kenya's quarterly Credit Officer Survey found that 27 percent of lenders expected real estate non-performing loans to increase in June, up from 14 percent in March, while 70 percent expected to intensify loan recovery efforts by September. Actual bad loans have nonetheless been falling: real estate NPLs stood at Sh109.8 billion of a Sh503 billion gross loan book last December, down from Sh130.7 billion three months earlier.
Analysts say the caution reflects a two-tier property market rather than a sector-wide crisis. Knight Frank's Africa Office Market Review for the first half of 2026 describes an undersupply of Grade A offices alongside an oversupply of lower-grade buildings, with average Grade A office rents in Nairobi at about $13 per square metre, unchanged since June 2022, occupancy at 84.8 percent and rental yields steady at 8.5 percent.