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uncertain future for real estate? bubble bust?
Etwani
#21 Posted : Wednesday, November 02, 2011 1:07:18 PM
Rank: New-farer

Joined: 9/8/2011
Posts: 23
I think real estate development will continue to grow for two main reasons - diaspora money (backed by weak Ksh)and continued use of external financiers
Injere
#22 Posted : Wednesday, November 02, 2011 1:16:02 PM
Rank: Member

Joined: 4/7/2010
Posts: 130
To be honest, the writting is on the wall - there will be a correction shortly. The supply of apartments and vacancies has increased.

Wanted to check something with you guys. I have been shown a few units in Nyayo Embakasi, the new phase. This place has thousands on units! Question is: Is this a worthy investment? Prices range about 5M- 5.5M and rents of approx 25-27k. My first concern is the supply - these are thousands of units!! Is capital appreciation a pie in the sky here?
For Sport
#23 Posted : Wednesday, November 02, 2011 2:32:10 PM
Rank: Veteran

Joined: 12/23/2010
Posts: 1,229
According to a survey conducted by the CBK last year, there were about 15,000 mortgage loan accounts (residential properties) in the country. Average loan size is in the 4 - 6.6 m range.

Look up "Mortgage Finance in Kenya: Survey Analysis."

The industry will not crash as a result of a few of them defaulting.
Mainat
#24 Posted : Wednesday, November 02, 2011 3:15:47 PM
Rank: Veteran

Joined: 11/21/2006
Posts: 1,590
V common misconception re mortgages..According to CBK's june monthly as at end of June, bank loans for real estate, construction and building were Ksh112bn i.e. just over 10% of all loans. If you add in a portion of Ksh118bn to private households, its even higher...
Sehemu ndio nyumba
For Sport
#25 Posted : Wednesday, November 02, 2011 4:20:55 PM
Rank: Veteran

Joined: 12/23/2010
Posts: 1,229
Injere wrote:
To be honest, the writting is on the wall - there will be a correction shortly. The supply of apartments and vacancies has increased.

Wanted to check something with you guys. I have been shown a few units in Nyayo Embakasi, the new phase. This place has thousands on units! Question is: Is this a worthy investment? Prices range about 5M- 5.5M and rents of approx 25-27k. My first concern is the supply - these are thousands of units!! Is capital appreciation a pie in the sky here?


You first asked this question a year ago.
Within the year, a lot has changed. Another phase was sold - at a higher price. If you were thinking of taking a loan to invest, now wouldnt be such a great time. You can ask for opinions here but you must at some point decide.
Injere
#26 Posted : Thursday, November 03, 2011 10:02:20 AM
Rank: Member

Joined: 4/7/2010
Posts: 130
ForSport - Thanks! it's true, i still havent made up my mind on this one...still dithering! What's the price of the current lot? Do you know if it's been sold out already?
For Sport
#27 Posted : Thursday, November 03, 2011 12:47:30 PM
Rank: Veteran

Joined: 12/23/2010
Posts: 1,229
Injere wrote:
ForSport - Thanks! it's true, i still havent made up my mind on this one...still dithering! What's the price of the current lot? Do you know if it's been sold out already?


Last ad I saw was for 6.1m for the 3 b/r flat. The same units were sold at 5.28m during the last phase.
I dont know whether they are sold out but you could call NSSF and find out...
githundi
#28 Posted : Thursday, November 03, 2011 1:00:04 PM
Rank: Veteran

Joined: 11/19/2010
Posts: 1,308
Location: nairobi metropolitan
For Sport wrote:
Injere wrote:
ForSport - Thanks! it's true, i still havent made up my mind on this one...still dithering! What's the price of the current lot? Do you know if it's been sold out already?


Last ad I saw was for 6.1m for the 3 b/r flat. The same units were sold at 5.28m during the last phase.
I dont know whether they are sold out but you could call NSSF and find out...

stanchart has an offes for Nyayo embakasi. Variable rate @ 11.9 and fixed rate for 1st 5 yrs @ 13.5, Term 20 yrs max. If salaried, i can assist on contacts.
Democracy does not belong to the dead
Injere
#29 Posted : Thursday, November 03, 2011 1:08:08 PM
Rank: Member

Joined: 4/7/2010
Posts: 130
Thanks @Githundi/ @ForSport - I will follow up on this issue appropriately. Appreciated.
githundi
#30 Posted : Thursday, November 03, 2011 2:51:57 PM
Rank: Veteran

Joined: 11/19/2010
Posts: 1,308
Location: nairobi metropolitan
Is the demand more than supply? If demand is measured by purchasing power, not just the need for homes, the supply and demand figures are fairly balanced. Note most of purchases for homes, land and vehicles are financed by loans from the banks, and as such, the rise in interest rates will discourage borrowing, or at least the amount the bank is willing to lend. This is because the higher instalments will reduce what one can qualify for while increasing the risk of default for those who have existing loans. The ability to buy will reduce, and consequently reduce real demand on real estate. In the short term at the current interest rates, i expect the prices to stabalize or slightly stagnate. It is for the same reasons that the demand for personal cars will continue to go down as it has always been fuelled by personal loans. Despite the depreciation of the shilling, and contrary to expectations, it will be a buyers market for these cars as result of erosion of disposable income and drying up of personal loans.
Democracy does not belong to the dead
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