Makes a lot of economic sense to me....@Wendz

100M for a 1/4 acre and 150M for a 1/2 acre in the leafy surbubs,can they justify these prices?I have recently noticed whole apartment blocks going for months on end without having watejaz..all in the name of being sold ama 90K/Month rent

I echo your sentiments on the need to weed out the developers who have no clue about what they are doing. I personally believe they are responsible for the market speculations which has caused the current sky-high property prices. In other news... we have a client with land looking for a developer to partner with to put up a property along ngong road. email me on lkaptich@propertyzote.com for more details.

Guys guys, hold up,

I still do not get the reasoning for a bubble burst in a city where 40% of property is bought cash!!!! A price correction , yes but very slight. Ile kitu iko is that rentals may come down once infrastructure is done such that I may prefer to move from Kileleshwa to Thika Rd ( also remember that rentals on Thika rd will also go up)so the differential may not be worth it. The guys who will be unable to service their mortgages will gladly sell the properties and make something from it. It is not like you wil have 10,000 units being sold at once.

The main cause of a property burst is borrowers losing income such that they cannot afford to pay mortgages. This hapepned on a large scale in the 1990s due to the SAPs and alot of properties were sold off but was there a bubble burst even with the very small middle class that existed then? Guys let us speak with facts not feelings like modern day journalists. Most residential houses (Syokimau, Kitengela,Katani etc) are not being put up by mortgages but by loans from SACCOs, Unsecured etc, so the lenders have really no way of directly linking this to the properties.

@Evolve - the theory of value adjustment and time value of money is well understood.

I love to challenge the mind. Hypothesis - I take the 4.5 and invest in a business today - exposure to risk much like housing is exposed to the imminent collapse. I double the capital in 3 years and pay myself a decent salary while investing more in the bizna. I rent a hse - max 20K (hata kama ni utawala ama ruai. 15 years later, with all factors considered, will I be able to buy the same house in cash at whatever it's value will be? Will the business still be there? So - the mortgage guy has had this heavy burden and has not been able to set up or grow his/her biz as much. Which is the better option? Of course rent went up also in the same duration...

Remember guys, I am just raising dust here - let's hear ur thoughts.

I hear you... but look at it this way.... in 2009, i invested in a property at 1.6m. Right now, the value is double that. In the same year, another lady bought her house at 4m (same area). Last month, she was offering me her house at 4.2m after making some improvements like putting up a tank, doing the drive way etc and to use her words "halafu utaona ni nini unaweza kuniongeza juu kwasababu ya hii developments"... as in, i was at liberty to say "i am paying 4.2m period"..... my point is, the appreciation of these two properties vs the capital injection is very different. Actually, i would go for an empty piece of land anytime than a house...... It will fetch me much better returns in the end.

For a house, i would go to building my own without credit if possible...... (in some economies, this would be absurd but in kenya, i think its much better)..... by the time i am done building, the house value doubles....