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Has the real estate bubble burst????
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MugundaMan
#11 Posted : Sunday, October 14, 2018 9:30:51 AM
Rank: Elder

Joined: 1/8/2018
Posts: 2,212
Location: DC (Dustbowl County)
Kenyans are very funny!

Does anyone remember Lukorito Jones (what a name by the way) and his doomsday articles many years ago about the "imminent" collapse of the R.E sector in Kenya.
I will say it again for the umpteenth time.

WAKE ME UP WHEN SOMEONE ANYWHERE IN THE WORLD MANAGES TO REPEAL THE LAW OF SUPPLY AND DEMAND.

Stalin tried in Russia, slaughtering 10 million people there trying to prove it and failed miserably.
The Chinese tried it until 1978 until the genius Deng Xiao Ping got religion fast and baptised the capitalism he legalised as a "unique brand of socialism with special characteristics" Laughing out loudly. The Chinese have been as capitalistic as the rest of us ever since!

When supply exceeds the whopping housing deficit in Kenya, come and tap me from my comfy bed where I will be slumbering and snoring away over this non-topic.

A slightly empty mall or apartment somewhere tells us nothing. The housing sector is not monolithic, and a temporary oversuppply in high end mall or office space in one or two buildings does not mean the entire sector is under collapse! Unless of course you are a big fan of the reasoning of Lukorito Jones. Laughing out loudly
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  | | Edit by user: Sunday, October 14, 2018 9:40 AM | Reason: Not specified
Coolbull
#12 Posted : Sunday, October 14, 2018 5:41:02 PM
Rank: Member

Joined: 10/23/2007
Posts: 604
I can say something is happening. Recently I was in Lower Kabete and realized they are many vacant 2 bedroom apartments, some even up to six months.

I think the market is adjusting to the real needs. Same place Lower Kabete, bedsitters, one-bedroom are going like hot cakes.

Mabati structures done half mawe/half mabati are ever in demand.

The best rates to charge is 14,999/=. Anything from 15K is a gamble.
I think this is happening because the young families who used to pay 15K and above bought buroti maguta maguta, developed and moved out.

Their younger counterparts are okay living in one-bedroom houses or well-finished two-bedroom mabati houses.
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obiero
#13 Posted : Sunday, October 14, 2018 7:22:04 PM
Rank: Elder

Joined: 6/23/2009
Posts: 14,213
Location: nairobi
Coolbull wrote:
I can say something is happening. Recently I was in Lower Kabete and realized they are many vacant 2 bedroom apartments, some even up to six months.

I think the market is adjusting to the real needs. Same place Lower Kabete, bedsitters, one-bedroom are going like hot cakes.

Mabati structures done half mawe/half mabati are ever in demand.

The best rates to charge is 14,999/=. Anything from 15K is a gamble.
I think this is happening because the young families who used to pay 15K and above bought buroti maguta maguta, developed and moved out.

Their younger counterparts are okay living in one-bedroom houses or well-finished two-bedroom mabati houses.


Bedsitter will never get out of style

KQ ABP 4.26
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Mike Ock
#14 Posted : Monday, October 15, 2018 8:16:57 AM
Rank: Member

Joined: 1/22/2015
Posts: 682
High end rentals are nowadays making zero sense in terms of time to break even. But most of the money in the high end wasn't really looking for a quick return anyway.
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MugundaMan
#15 Posted : Monday, October 15, 2018 8:42:47 AM
Rank: Elder

Joined: 1/8/2018
Posts: 2,212
Location: DC (Dustbowl County)
Mike Ock wrote:
High end rentals are nowadays making zero sense in terms of time to break even. But most of the money in the high end wasn't really looking for a quick return anyway.


Depends on what you mean by "break even" smile
I personally do not even look at rental yield as a factor in Kenya given the nature of cost structure in the industry. If you buy a 30m apartment for example and then hope to "break even" on the rents soon, you might be waiting decades. But what you lose in rental yields you gain in cap gains. This is why you are absolutely correct to say money in high end is not looking for a quick return (cash flows) and are very happy to wait 3, 5, 10 and even 20 years+ to make their real mint.
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  | | Edit by user: Monday, October 15, 2018 8:44 AM | Reason: Not specified
sparkly
#16 Posted : Monday, October 15, 2018 8:55:47 AM
Rank: Elder

Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
MugundaMan wrote:
Mike Ock wrote:
High end rentals are nowadays making zero sense in terms of time to break even. But most of the money in the high end wasn't really looking for a quick return anyway.


Depends on what you mean by "break even" smile
I personally do not even look at rental yield as a factor in Kenya given the nature of cost structure in the industry. If you buy a 30m apartment for example and then hope to "break even" on the rents soon, you might be waiting decades. But what you lose in rental yields you gain in cap gains. This is why you are absolutely correct to say money in high end is not looking for a quick return (cash flows) and are very happy to wait 3, 5, 10 and even 20 years+ to make their real mint.


Buildings depreciate and in 20 years the apartment is half way through its useful economic life.
Life is short. Live passionately.
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MugundaMan
#17 Posted : Monday, October 15, 2018 9:22:05 AM
Rank: Elder

Joined: 1/8/2018
Posts: 2,212
Location: DC (Dustbowl County)
sparkly wrote:
MugundaMan wrote:
Mike Ock wrote:
High end rentals are nowadays making zero sense in terms of time to break even. But most of the money in the high end wasn't really looking for a quick return anyway.


Depends on what you mean by "break even" smile
I personally do not even look at rental yield as a factor in Kenya given the nature of cost structure in the industry. If you buy a 30m apartment for example and then hope to "break even" on the rents soon, you might be waiting decades. But what you lose in rental yields you gain in cap gains. This is why you are absolutely correct to say money in high end is not looking for a quick return (cash flows) and are very happy to wait 3, 5, 10 and even 20 years+ to make their real mint.


Buildings depreciate and in 20 years the apartment is half way through its useful economic life.


Laughing out loudly Laughing out loudly Laughing out loudly

Are you sure?
Then how come colonial bungalows well built in the early 1900s are still standing and perhaps even better built than today's homes?
And how come KICC is still growing in value and "useful life" despite being way beyond 20 years?
Depreciation for real assets (property) is just an accounting concept my broda. Unlike a car with moving parts or a radio that stops working after a certain amount of years, stones in a building do not decay under normal conditions. This is why castles built in Europe in the 1100's such as Windsor below are still standing and occupied and beautiful as ever today.
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sparkly
#18 Posted : Monday, October 15, 2018 1:39:35 PM
Rank: Elder

Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
MugundaMan wrote:
sparkly wrote:
MugundaMan wrote:
Mike Ock wrote:
High end rentals are nowadays making zero sense in terms of time to break even. But most of the money in the high end wasn't really looking for a quick return anyway.


Depends on what you mean by "break even" smile
I personally do not even look at rental yield as a factor in Kenya given the nature of cost structure in the industry. If you buy a 30m apartment for example and then hope to "break even" on the rents soon, you might be waiting decades. But what you lose in rental yields you gain in cap gains. This is why you are absolutely correct to say money in high end is not looking for a quick return (cash flows) and are very happy to wait 3, 5, 10 and even 20 years+ to make their real mint.


Buildings depreciate and in 20 years the apartment is half way through its useful economic life.


Laughing out loudly Laughing out loudly Laughing out loudly

Are you sure?
Then how come colonial bungalows well built in the early 1900s are still standing and perhaps even better built than today's homes?
And how come KICC is still growing in value and "useful life" despite being way beyond 20 years?
Depreciation for real assets (property) is just an accounting concept my broda. Unlike a car with moving parts or a radio that stops working after a certain amount of years, stones in a building do not decay under normal conditions. This is why castles built in Europe in the 1100's such as Windsor below are still standing and occupied and beautiful as ever today.



@MugundaMan are you for real? Who doesn't know that BUILDINGS depreciate and LAND appreciates. Engaging with you is engaging with an ignoramus too cocky in his ignorance. I will never respond to your posts again.
Life is short. Live passionately.
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MugundaMan
#19 Posted : Monday, October 15, 2018 1:49:59 PM
Rank: Elder

Joined: 1/8/2018
Posts: 2,212
Location: DC (Dustbowl County)
sparkly wrote:
MugundaMan wrote:
sparkly wrote:
MugundaMan wrote:
Mike Ock wrote:
High end rentals are nowadays making zero sense in terms of time to break even. But most of the money in the high end wasn't really looking for a quick return anyway.


Depends on what you mean by "break even" smile
I personally do not even look at rental yield as a factor in Kenya given the nature of cost structure in the industry. If you buy a 30m apartment for example and then hope to "break even" on the rents soon, you might be waiting decades. But what you lose in rental yields you gain in cap gains. This is why you are absolutely correct to say money in high end is not looking for a quick return (cash flows) and are very happy to wait 3, 5, 10 and even 20 years+ to make their real mint.


Buildings depreciate and in 20 years the apartment is half way through its useful economic life.


Laughing out loudly Laughing out loudly Laughing out loudly

Are you sure?
Then how come colonial bungalows well built in the early 1900s are still standing and perhaps even better built than today's homes?
And how come KICC is still growing in value and "useful life" despite being way beyond 20 years?
Depreciation for real assets (property) is just an accounting concept my broda. Unlike a car with moving parts or a radio that stops working after a certain amount of years, stones in a building do not decay under normal conditions. This is why castles built in Europe in the 1100's such as Windsor below are still standing and occupied and beautiful as ever today.



@MugundaMan are you for real? Who doesn't know that BUILDINGS depreciate and LAND appreciates. Engaging with you is engaging with an ignoramus too cocky in his ignorance. I will never respond to your posts again.



https://www.yourinvestme...-or-fiction-142813.aspx

My broda, why is it so hard for you to believe that buildings are depreciable from a tax perspective but appreciate in value over time?
Whuch building that is made of stone and tiles have you ever seen in Kenya that has never appreciated in value?
As for not speaking to me due to me "being an ignoramus" Laughing out loudly that is your right baba, I meant no offence, this is just a simple exchange of ideas.
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Pesa Nane
#20 Posted : Monday, October 15, 2018 2:42:33 PM
Rank: Elder

Joined: 5/25/2012
Posts: 4,105
Location: 08c
sparkly wrote:
MugundaMan wrote:
sparkly wrote:
MugundaMan wrote:
Mike Ock wrote:
High end rentals are nowadays making zero sense in terms of time to break even. But most of the money in the high end wasn't really looking for a quick return anyway.


Depends on what you mean by "break even" smile
I personally do not even look at rental yield as a factor in Kenya given the nature of cost structure in the industry. If you buy a 30m apartment for example and then hope to "break even" on the rents soon, you might be waiting decades. But what you lose in rental yields you gain in cap gains. This is why you are absolutely correct to say money in high end is not looking for a quick return (cash flows) and are very happy to wait 3, 5, 10 and even 20 years+ to make their real mint.


Buildings depreciate and in 20 years the apartment is half way through its useful economic life.


Laughing out loudly Laughing out loudly Laughing out loudly

Are you sure?
Then how come colonial bungalows well built in the early 1900s are still standing and perhaps even better built than today's homes?
And how come KICC is still growing in value and "useful life" despite being way beyond 20 years?
Depreciation for real assets (property) is just an accounting concept my broda. Unlike a car with moving parts or a radio that stops working after a certain amount of years, stones in a building do not decay under normal conditions. This is why castles built in Europe in the 1100's such as Windsor below are still standing and occupied and beautiful as ever today.



@MugundaMan are you for real? Who doesn't know that BUILDINGS depreciate and LAND appreciates. Engaging with you is engaging with an ignoramus Laughing out loudly Laughing out loudly Laughing out loudly too cocky Laughing out loudly Laughing out loudly Laughing out loudly in his ignorance. I will never respond to your posts again Laughing out loudly Laughing out loudly Laughing out loudlyLaughing out loudly Laughing out loudly Laughing out loudlyLaughing out loudly Laughing out loudly Laughing out loudly.

Pesa Nane plans to be shilingi when he grows up.
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