How real estate greed is leaving Kenyans broke and in debts
It is no longer a secret that the real estate sector bubble has burst. Builders are being left with houses no one wants to buy, firstly because there is no money in the economy, and secondly because of greed. The following commentary which appeared on social media captures everything that has gone wrong with Kenya’s property sector:
Pay a visit to Athi River, Kitengela and other peris urban areas and see ghost Estates rotting away with no habitation and developers sinking in debt they can’t pay.
Visit the hub. Notice it’s half-empty. The tenants in it are paying half-rent currently to coax them into staying so as try attract others.
Building is not the problem, selling off what you have built to make your money back is the current problem.
The Delta company did 400 housing units in Sasaki, they struggled like crazy to sell. Concurrently they duty Delta in Westlands and they are happy to host COG as their biggest tenants. The owner swears he’ll never touch housing estate ever again. He learnt his lesson.
The housing need is far from being met. But, we are not having housing development that’s affordable to the very masses that need it.
Cytonn investments rode on selling to the diaspora population. It’s quickly getting saturated and waking up to the reality that one spends 20mil on a house in Syokimau to rent it for 50k. Takes 33yrs to just get your money back. You are dead and have never enjoyed a shilling worth of profit from the house.
– Its only in kenya you buy an apartment at 30M and rent it out @80k per month and rarely get a tenant
– Yep. The bubble poped. The prizes must be re adjusted for affordability. Now housing finance is on a 30% discount campaign. Unfortunately it’s a marketing gimic. They have to go down by 40-50% in reality. Developers were making over 100+% in profit. They have to settle on a realistic 20-30% mark up. Or 100% loss.
– The problem with the real estate developers is…they seem to target the upper and the middle upper class of customers …develop a product for the mass market and you will sell.This can work out if the government subsidises building materials or scrap off taxes ..to make the end product affordable (which is impossible coz we are a young economy)Otherwise building in Kenya is Damn expensive.
– The government is inflating land prices with the current 4% stamp duty on land. It’s a tough call for our children.
– Developers need to face reality,
1. Kenyas Economy is rotten and getting more rotten by the day.
2. Kenyans even in the diaspora are very aware of ROI..if it doesnt make sense then they dont even touch it.
3. Days for developers to make 100% profit are gone…gone kabisa.
There are also cheaper methods of construction now.
Stealing money in Kenya is also becoming very difficult..the small guys who used to roll this money down to the mwananchi are now being caught ..no illegal money flying around anymore…
As a realtor biggest problem is developers refusing to listen especially in Nanyuki where I am based.
– That estate location matters so much, i was in a term building some apartments in kitengela each cost 15M, yet some 2km away is a prime land selling @ 1.5M I freely advised a buyer to go buy the land and build a good house worth 5M and get something running with the rest of his cash.
– Am seeing some 11m houses in Nakuru,hao watalilia kwa choo,kwanza the kanyumba is worth 3m surely ati coz it’s gated,nkt sick joke
– REAL ESTATE,,Is Just A Front To Launder/Clean Illegally Acquired Cash,,Can Never Work Out Where 70% Population Earns 3Dollars Wages A Day,,!
– Many a times I don’t advice my clients to buy offplans,sometimes one ends up not getting a dream of his /her life..though it depends with the company one intends to…..allways good to buy a plot and built the dream of your life house!
– Most companies are targeting the rich, very few Kenyans can meet their demands of pay ksh 500k today and clear the balance of 1m within 3 months
What is crippling the Real Estate branch is Greed and lack of government control as far prices are concerned.
-In Germany for example, there are Rules and Regulations pertaining to renting and construction issues. As a landlord/lady you just can’t demand any amount of money just because it is your house.
The price depends on Location and Square Metres in Question. Best Assets to Buy in Kenya. Best Assets to Buy in Kenya.
This content was originally published here.