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Pirates affect Nairobi house prices

Summary

26 March 2010

According to estate agents in Kenya's capital Nairobi, house prices have doubled in the past three years. But this isn't just because of increasing wealth or investors¹; it's possible that there's also another, far more interesting reason.

Reporter:

Rachel Wright

Report

While property prices in the United States have fallen almost 30 per cent in the last three years, the cost of homes in the Kenyan capital Nairobi has almost doubled, according to estate agents in the city.

Some of the reasons for this rise can be attributed to improvements in the city's infrastructure² and people fleeing the violence in the Rift³ valley. But, there could be another, much more fascinating factor.

Pirates operating off neighbouring Somalia's coast are thought to generate tens of millions of dollars a year. And Joseph Kaeyah, from the Kenya Institute of Public Policy Research, thinks that some Somali pirates are using the Nairobi property market.

According to Nairobi estate agent Charles Mwangi, the reasons 

pirates may be doing this is obvious. It could be a way of hiding their cash or laundering⁴ it. He's concerned about the impact this is having on ordinary Kenyans, as an increasing number of middle class families cannot afford to buy homes.

Rachel Wright, BBC News