Wazuans:>>The difference between Kenya and western cities is:Kenyans earn their money through corruption,drugs and scams like Goldernberg.But in western cities,they earn through wages/salaries...etc.Those crooked Kenyans are the ones driving the prices up......Its criminal money & money laundring at work....and it explains that scenario.

Our property prices are just unrealistic!

And we are always busy buying them at those prices. Kenyans peculiar habits

To back you up....

"While addressing the subject of whether the country could be on the cusp of a property burst on October 12, Alister Murimi, a managing director at Ark Consultants Limited, a Nairobi-based real estate consultancy firm, said the likelihood of such a crisis was too remote to consider.

“To me, a property crash in Kenya is a mirage,” Murimi, who is also poised to become the chairman of the yet-to-be established Kenya Real Estate Index (Krex), told pension scheme managers, developers and real estate professionals who had attended the first annual real estate investment conference in Nairobi.

He said the current property boom would continue because demand still outstrips supply by far. “Everything is looking up,” he summed up his presentation."

hate speech

@Murchr....wooowww...I have also just seen that article on Nation! I think the burst is really obvious...glaring at as on the face. For those, wo believe guys like 'Ark consultants'...well, am yet to meet a car seller, who will tell me the car on sale has defects;)
The prudent ones are saving up like vultures waiting to devour those burst victims!!
http://www.nation.co.ke/...2/-/11kllft/-/index.html

My view is that anyone who wants to get into real estate should target the lower middle income group. Again I say, we aint making enough millionaires. If the courts grant Jirongo and is it Orbit chemicals the right to demolish the settlers on the land in industrial area...imagine the crisis.

as an aside, academia is not one of teh best payers in the world. But I agree with you, the rate at which land prices rise in Nairobi is hard to understand. A patch with grass grows in value almost overnight without even fencing it

The only thing that can cause a massive price crash is political instability. Our economy is glued to politics and if things get haywire, a huge number of people will be left unable to pay their mortgages resulting in a surge in defaults and over the roof foreclosures. There will be a massive oversupply in houses with no buyers and no lenders in the pictures. All the big money will move out and it’ll take years to rebuild.

Otherwise its very unlikely for the market to crash, however a correction has been on the table from 2010 but hasn’t seriously shown its face in the market yet. The nation article lists the following as a cause of a bubble:

“low bank interest rates, variable rate loans, easy-to-get credit, a willingness of home buyers to take out second and third mortgages, long-term repayment terms and mortgages that exceed the value of the home”

How many of the above factors do you think apply to our situation? I can tell you for a fact that Kenyan banks don’t hand out money like fools and it’s almost unlikely that you’ll get a mortgage beyond what you can afford.

The real reason behind Nairobi prices is an emerging middle class, yes there are many new IT guys, lawyers and other professionals who have the earning power (not seen in moi days) to afford houses and apartments within prime estates, the second crop of people are those who bought apartments early on and are now moving to villas. It also needs to be understood that these people have their lifestyles entrenched in the area they live in i.e. schools, church, shopping, social circles etc. So until we have the necessary infrastructure to complement this lifestyle outside the city, Nairobi will be a residential hotspot. The opening of thika highway is not enough to dampen the market, at least 3 other highways originating in areas which can provide the same alternative lifestyle are needed.

Such infrastructure wouldn’t come overnight, it would take around 20-30 years. Meanwhile Nairobi is an expanding hub, coupled with the oil discovery and increasing population which is likely to earn more, there is no way a crash is imminent.

Please don’t compare the general American real estate market to ours; we operate on completely different dynamics. The house posted on this thread is in florida, a place where there are is no significant economic or employment opportunity yet it has a serious housing oversupply. Secondly suburban houses in America are made of wood and prefab boards thus the cost is lower than a proper Kenyan house made of stone and concrete. Thirdly most of our finishing are imported and thus overpriced, so if you want quality you got to pay for it. If you really feel the need to compare then compare our market with places with limited infrastructure or no room to expand like Sao Paulo or Manhattan and let us know what you find.

In 2001 I sold 4 bedroom apartments in westlands for 1.8 million, so I know a rough market and trust me we are still far from it. An apartment project which started in January is already 65% sold with around half the buyers coming in with cash. My completed projects i.e offices, apartments and villas are almost sold out, just one or two units remaining on every project. The guys who are facing problems right now are those who have no clue what real estate is about, they saw people making money, thought its an easy game and jumped right in. A correction would be a nice way to weed them out.

And @Rapudox: Start making that 150,000 work for you and you'll be where you want in a few years.

@pariah...i meant Professional not Professor.
@Vj.I think your opinion actually confirms our predictions. I cant say i understand economics fully, but the law of supply & demand, i believe, is only stable & sustainable in the right environment...like say Manhattan, which u mentioned. In any other environment, like Nairobi, its just a mirage. Factor our politics into this & the situation is clear. The oil is still a distant prospect & doesnt guarantee much e.g. Naija. The prices have hit the ceiling.....and no prudent person would buy an apartment for 15-20M. With this cash, you can pay rent for 20yrs & still build a house outside NBI. As for me, I will save my 150K at meagre 2-4% interest rate & wait patiently.