Nipate
Forum => Kenya Discussion => Topic started by: Globalcitizen12 on March 08, 2017, 04:47:10 PM
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As an investor in the sector I am happy that speculators are leaving the market. Now it just a matter of the market normalizing land prices and business will recover. There is still surplus of housing units especially in upper and middle income markets. Occupancy in these markets is at 87% to 95%.. Most investors who did not build using cash or lower interest loans are getting their fingers burnt badly. The focus now should be on provision of infrastructure to support investments in new markets..Road network around Nairobi neighbouring towns has allowed the market to expand 50 kms away from the city North of Kiambu towards RV. I am surprised that sleepy towns such as Viewpoint Rukuma are now housing Nairobi residents.. One better thing of living in these areas is you get access to low priced food and schools. Plus the quality of life in the village is far much better
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Global...
Are you sure?
Ive been hearing that since 2010..
Evidence please.
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When is last time your heard about suraya and others ..The market has cooled off kabisa..
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I still see apartments for 40 million. That doesn't look like stability
When is last time your heard about suraya and others ..The market has cooled off kabisa..
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When is last time your heard about suraya and others ..The market has cooled off kabisa..
Doubtful.
The main driving force for our real estate is corruption proceeds. CBK records only about 20k mortgages in the whole of Kenya.
2017 is an election year, with billions expected to be blown, from the "lowly" MCA upto the president, and hundreds of government jobs, parastatals, etc. Once these positions are filled, most if not all of the newly crowned "public servants" are first going on a massive looting spree then a shopping spree, priority being real estate.
A little story: in August 2013, just a couple of months after the cabinet secretaries had been sworn in, a certain CS who did not have previous access to millions, paid cash for 1.5 acres vacant land in Karen. Price? Sh60m, and said CS barely negotiated. The house was constructed and completed within 9 months, including sauna, swimming pool, multi-car garage, etc. A spectacle to behold, it is.
Trickle down economics, Kenyan style.
As long as real estate is seen as the safest bet for holding ill-gotten wealth, that's what sustains our real estate market. Waiguru? Ministry of health scandal? Bank's management siphoning cash? Real estate.
One day the market will crash, but not yet.
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One day the market will crash, but not yet.
Kenya is so full of crooks and aspiring crooks that the only safe places to invest are in things one can see and touch: land and real estate. But, for some reason, land is easier to steal, so there isn't an overwhelming variety in choice for most people. Land seems to be good only if one has the connections (and guaranteed safety) to plan ahead for compensation in relation to some infrastructure project.
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Empedocles,
You got me wrong.. What I said is that speculators are leaving.. Karen market and markets of Heavy thieves will always thrive as this is a niche market.. The general market of good guys speculation on 40 by 50 plot in kagundo is what is drying up and with it normalcy is returning to the market..
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Empedocles,
You got me wrong.. What I said is that speculators are leaving.. Karen market and markets of Heavy thieves will always thrive as this is a niche market.. The general market of good guys speculation on 40 by 50 plot in kagundo is what is drying up and with it normalcy is returning to the market..
I beg to differ
Using your example of Kagundo, a place I know quite well, the frenzy is still on. What's driving the real estate frenzy among ordinary folk is not corruption, but the simple fact that there's really no other way of making bucks, aside from stealing, but for that you have to be in gava.
There's no industry (like almost everywhere else in the country), what jobs are available in the market are slowly but surely dwindling, and people still gotta live, eat, mpesa bucks. So real estate is mainly all there is. Have a look next time while driving along Kagundo road towards Kagundo. Admire the staggering proliferation of all the struggling hardware stores along the road, selling their wares, touting the false strength of real estate. Real estate is seen as king. And where there's a king, speculators thrive.
Simple Homes. A dream for Kenyans. Advertised through slick videos on Facebook, stolen from US architects. Beautiful houses with central heating( :D). Cheap. Pay something like Sh50'000 per month for up to 40 years and get a fantastic 4 bedroom house. Just collapsed, taking 16'000 for a ride, 16'000 who paid a joining fee of 55'000 each and 16'000 who paid up to Sh380'000 deposit, for real estate.
16'000 wanainchi as speculators, burned, in less than a year.
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There are 20k mortgages in kenya but what most people don't count is the number of sacco accounts in Kenya. Almost every sacco member have some kind of loan and a significant number in plot/building loans.
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Precisely. Most of housing you see in Nairobi outskirt are financed by Sacco loans. Corruption cannot explain this. It would explain every sector. The guys building in Kangundo or Kitengela are simple folks borrowing from saccos and strapping few resources up - to build small houses there.
Real estate in kenya is maybe 50yrs from over-supply.
There are 20k mortgages in kenya but what most people don't count is the number of sacco accounts in Kenya. Almost every sacco member have some kind of loan and a significant number in plot/building loans.
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Precisely. Most of housing you see in Nairobi outskirt are financed by Sacco loans. Corruption cannot explain this. It would explain every sector. The guys building in Kangundo or Kitengela are simple folks borrowing from saccos and strapping few resources up - to build small houses there.
Real estate in kenya is maybe 50yrs from over-supply.
There are 20k mortgages in kenya but what most people don't count is the number of sacco accounts in Kenya. Almost every sacco member have some kind of loan and a significant number in plot/building loans.
Precisely?
Ok, why don't you give us the breakdown of registered saccos (not the con ones...of which they're very many), number of members, and the percentage of said members who use sacco loans (please include average and median loan amounts...with sources) to finance real estate investments?
Once we have your data, those which make you yell "Precisely", maybe we can join you.
I'd be happy to.
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Precisely. Most of housing you see in Nairobi outskirt are financed by Sacco loans. Corruption cannot explain this. It would explain every sector. The guys building in Kangundo or Kitengela are simple folks borrowing from saccos and strapping few resources up - to build small houses there.
Real estate in kenya is maybe 50yrs from over-supply.
There are 20k mortgages in kenya but what most people don't count is the number of sacco accounts in Kenya. Almost every sacco member have some kind of loan and a significant number in plot/building loans.
Precisely?
Ok, why don't you give us the breakdown of registered saccos (not the con ones...of which they're very many), number of members, and the percentage of said members who use sacco loans (please include average and median loan amounts...with sources) to finance real estate investments?
Once we have your data, those which make you yell "Precisely", maybe we can join you.
I'd be happy to.
Download the financial access household survey http://fsdkenya.org/publication/finaccess2016/ and go to chapter 8 .You'll find most people borrow from saccos for land/house purchases.
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Precisely. Most of housing you see in Nairobi outskirt are financed by Sacco loans. Corruption cannot explain this. It would explain every sector. The guys building in Kangundo or Kitengela are simple folks borrowing from saccos and strapping few resources up - to build small houses there.
Real estate in kenya is maybe 50yrs from over-supply.
There are 20k mortgages in kenya but what most people don't count is the number of sacco accounts in Kenya. Almost every sacco member have some kind of loan and a significant number in plot/building loans.
Precisely?
Ok, why don't you give us the breakdown of registered saccos (not the con ones...of which they're very many), number of members, and the percentage of said members who use sacco loans (please include average and median loan amounts...with sources) to finance real estate investments?
Once we have your data, those which make you yell "Precisely", maybe we can join you.
I'd be happy to.
Download the financial access household survey http://fsdkenya.org/publication/finaccess2016/ and go to chapter 8 .You'll find most people borrow from saccos for land/house purchases.
Thanks.
Quick glance only: can't yell precisely yet.
Will go through it this evening.
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Empo - I think you've been answered - Kenya co-op movement is the largest in Africa and one of the largest worldwide - it explain a lot about our resilience. Kenya long figured out how they can borrow their own money, buy property as groups (SACCO buys) and sell to members - and then loan members. One SACCO can easily buy 1,000 acres cheaply and sub-dived - give it to 8,000 members and you have 8,000 units.
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I think SACCOs are excellent idea, but they need to focus on other things other than property. Industry is severely lacking.
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The only business growing is government!! People are too dependent on govt - for pay, contracts, steal, etc.
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Empo - I think you've been answered - Kenya co-op movement is the largest in Africa and one of the largest worldwide - it explain a lot about our resilience. Kenya long figured out how they can borrow their own money, buy property as groups (SACCO buys) and sell to members - and then loan members. One SACCO can easily buy 1,000 acres cheaply and sub-dived - give it to 8,000 members and you have 8,000 units.
No, haven't been answered.
The information I requested is not in the document.
What I was looking for, and find impossible to locate, is what's driving the real estate market, to a point where land appreciation is beating all other economic indicators by a very significant margin.
P.S. I've sold land to a couple of SACCOs, for subdivision. I kind of understand how it works.
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I think SACCOs are excellent idea, but they need to focus on other things other than property. Industry is severely lacking.
There's no quick money in industry.
There's quick money in land.
Finding out why will help Kenyans understand what's going on.
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Speaking of quick money in land, grabbing of prime property is happening once too often in Kenya:
Justice, Kenyan style, was swift and merciless:
Perpetrators are well known:
Then Sonko steps in, with wise fatherly advice:
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Nairobi or Kenya property rights are not guaranteed..I almost lost 30k dollars but due to my sceptical nature I trusted my gut instinct
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Its so easy to lose your hard earned money....
SAD!!!
https://www.standardmedia.co.ke/business/article/2001231943/how-simple-homes-left-many-kenyans-dreams-in-ashes
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Be sceptical when the deal sounds too sweet. In Kenya such crooks thrive as they have nothing to fear. Next they will be going for an elective post. Note how little attention this scam has got even from the local media. It is considered as normal and those conmen are considered to be legit businessmen.
Could be the last time your are hearing on this scam.
Its so easy to lose your hard earned money....
SAD!!!
https://www.standardmedia.co.ke/business/article/2001231943/how-simple-homes-left-many-kenyans-dreams-in-ashes
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Economist calls the top of high end kenya real estate market. http://www.economist.com/news/middle-east-and-africa/21722664-does-start-africas-tallest-building-signal-end-kenyas-boom-work
COULD Nairobi, Kenya’s traffic-clogged capital, be the next Dubai? Two large Dubai-based investors, Hass Petroleum and White Lotus, seem to think so. On May 23rd they formally started construction of what they claim will be Africa’s tallest building. Out of a vast hole in the ground in Upper Hill, a neighbourhood full of government offices, will rise two towers, the taller some 300 metres high and named “The Pinnacle”. (For comparison, the Burj Khalifa in Dubai, the world’s tallest building, is 828 metres high). One will contain a hotel; the other, some 150 swanky apartments (or “residences”). A helipad will jut out of the roof of the taller tower, allowing the truly plutocratic to be whisked in over the traffic jams from the airport.
The investment is a fillip for Kenya. Much of Africa is in economic trouble. In 2016, according to the IMF, annual GDP growth across the continent sank to just 1.4%, the lowest rate in 20 years. Yet Kenya, which depends less on oil and mining than most African countries, has kept growing. Its economy probably expanded by 6% in 2016. Much of that came from projects such as the Pinnacle, a $220m investment. Nairobi’s skyline is dotted with cranes; new suburban housing estates are flourishing at the edge of the city. However, not everyone is confident that it can last.
For most of the past decade, investing in property in Nairobi has been extraordinarily lucrative. “Ten years ago, anything, honestly anything, would sell out,” says Sakina Hassanali of Hass Consult, a property agency unconnected to Hass Petroleum. House prices have more than doubled since then, despite a flood of new apartment blocks and housing estates. As well as foreign investors, the boom has been underpinned by investment from wealthy Kenyans. Faced with an illiquid stock exchange and precarious banks, they have preferred to put their money into property. Scammers have got in on the frenzy, selling land they do not own, or off-plan apartments which are then built shoddily or not at all.
Yet the property boom is now slowing. “Prime” residential rents fell by 6% in 2016, according to Knight Frank, another property firm. In some corners of Nairobi half-built houses have sat for months with no progress. It is not clear that there are enough Kenyans who can afford to rent them. Most forecasters expect economic growth to slow, because of uncertainty about the Kenyan general election in August. Investment in infrastructure has helped to fuel the economy, but this could tail off after the election.
Could the construction of Africa’s tallest building turn out to be the last dance of the party? When asked who will live in his firm’s new “residences”, Abdinasir Hassan, the chairman of Hass Petroleum, points to “the large number of expatriates” working for NGOs in Nairobi. He also thinks that Nairobi will become a new financial hub for Africa. Yet few NGO workers are lavishly paid—and none is likely to need a helipad.
This article appeared in the Middle East and Africa section of the print edition under the headline "The last dance"
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The sad thing is that the govt let the real estate drive the economy and did not take advantage of the situatuion. Could have used money from taxation to improve on infrastructure instead of borrowing to build the infrastructure. Now that the moment is gone I wonder what the state of infrastracture will look like in ten yrs.