since the land tax issue seems to rub some powerful groups the wrong way, thus making it very hard to pass or enforce - the government or local authorities should just focus on building more roads especially to open up more interior areas since land value in nairobi is directly proportional to roads - thats why most land agents always use a new proposed bypass as a major selling point.

How many times do people have to pay for roads? I guess all these are factored into the fuel levy!! So already the money exists.

A big one. In Eastleigh, sorry for being stereotypical, a 40 by 80 plot can fetch 10m.
How does somebody recoup their investment?? Surely.
The knock off effect has spiralled on to other areas.

My question is on the fuel levy. Secondly, I don't think taxation on capital gains(land in this case) will result in more revenue than the fuel levy. Speculators will stop speculating and the current frenzy will stop.

The Somali piracy menace has significantly decreased over the years, with only 10 incidents reported so far this year. Their money is not what is currently driving the fake real estate house boom although it may have contributed at the beginning. Corruption proceeds have so distorted the market it’s led to many people believing there is no bubble since most purchases are financed in cash (CBK data). Very few realize that corruption proceeds are, in a sense, extremely cheap loans (0% interest and no need to pay back!) being ploughed into real estate. Since 9/11, it’s quite obvious why and partially explains how the real estate boom started in 2002 i.e. Murungaru’s woes hiding money and later Okemo’s extradition case.

The knock-on effects: we now have a situation where the ordinary mwananchi is having difficulty finding a place to call home, even far from Nairobi, where the pirate money never entered but corruption money has: Property boom turns tide against Kiambu., something being replicated across the country where the real estate boom has gotten a foothold.

Now add the poverty level which according to the WB has remained constant for the last few years: Kenya fails poverty reduction test, putting paid to arguments that Kenyans are getting richer.

As the title of this thread states, one of the very few avenues left to make a fortune is to get into real estate and speculate, further escalating the problem i.e. Express Kenya to build houses 15-acre land. Quote from the article: ”Express Kenya joins a growing list of NSE listed companies that are turning to the vibrant real estate sector to boost their growth.” These companies are sidelining their main business, competing against corruption proceeds (extremely hot money), all leading to a vicious bubble that can and must end with misery, a situation which is aptly summed up by one of Warren Buffet’s most famous quotes : “Be fearful when others are greedy and greedy when others are fearful”.

about 5 years ago, land and rent was cheap in many parts of thika roads because of the perennial traffic jams and lack of roads. when the superhighway came, prices of land and rent skyrocketed since it reduced the time taken to go to town. right now, even after the highway, traffic jams of 5 years ago are now back on thika road, and with ongoing massive developments, jam might be worse 5 years from now than it was five years ago. but this time round land will still be expensive

capital gains tax seems like an interesting concept, but won't that drive the speculators into overdrive, they might start claiming that on top of a proposed bypass an internal port is coming up or some valuable mineral has been discovered nearby.

I think with time the whole kaplot mentality will disappear, especially after the 'diasporians' come home and realize the powerpoint 3d flash animations used to sell the plots to them equates to vast dry impassable black cotton soil when it rains - on ground reality.

the matatu industry was at that point in the 90's upto to the recent past, also the stock market had gotten the momentum until the mobitelea ghost came along and people discovered land.

It puzzling really,i mean these prices keep going up and there's no sign of abating because valuers architects and other players in the industry validate these prices in their reports. this sends a strong signal to the market that prices are supported by fundamentals.I would be worried if borrowing cost in kenya was low.
Population growth and animal spirits will sustain the demand for plots and land for quite some time,as is the growth that we r about to experience in coming years.... however i strongly think the demand for ready built houses will come down soon.

Kajiado Interior, Loitoktok, Amboseli, Interior of Isiolo, etc.

I think the land prices around Nairobi are high because of volatile inflation, so people prefer hard assets that have returns higher than the inflation rate. Since choices are limited, majority of people store their money in land, demand for land then outstrips its supply (in the Nairobi region) so the prices start inching up, and as more people get more disposable income, they look at land as a safe haven to park their cash, resulting in outrageous prices! I cant even imagine why someone would buy one acre of land for 250m an acre! Once devolution happens, and financial markets are better regulated, and interest rates go down and inflation is tamed, then those land prices will have to go down, in other words once investors have confidence in the value of money through stable financial environment and government policies that protect investor rights, that's the only way that investors will stop flooding into land and hence over valuing it.