The wife of one of the dead, a German tourist who had arrived in Kenya on holiday a fortnight ago, was also injured in the attack and had been taken to hospital. The second victim was the German owner of the villa.
Police said the killings did not appear to be linked to violence which has rocked large parts of Kenya following the disputed re-election of President Mwai Kibaki a month ago.
"This was organised crime. We are treating it as murder," local police chief Stanley Lamai said.
The gang of around eight youths forced themselves into the villa compound as a watchman opened the gate to allow the Germans in after they returned from dinner, police said. The youths escaped with a stolen camera and some money.
Around 800 people have been killed in ethnic fighting and clashes with the security forces around Kenya since the Dec. 27 polls, violence which has battered the country’s image as an east African tourism and trade hub.