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Insightful take on Nairobi Real Estate
Rank: Member Joined: 8/27/2008 Posts: 70
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TB,This thread was a good way to try & repair the bruises you sustained from Mukiha on the recent EB thread!
That said,cost of property in Nairobi & other urban areas will not come down anytime soon since more and more people are moving into cities. By 2050,more than half of the human population world wide will be living in cities. For Kenya,the number of people living in Nairobi will also increase as we move away from the agricultural economy. Those saying that the capital can be relocated from Nairobi should tell us how easy it will be or how much it would cost to do the following in a remote location: · Construct another JKIA · Construct another KNH · Build another parliament & statehouse · Build government buildings and parastatals · Construct roads,railway station · Come up with posh estates like Runda,Karen,Muthaiga,etc where the rich and famous will be willing to stay · Construct perfect infrastructure i.e. electricity,water & sewerage facilities · Stay away from UNDP HQ! · & much more… So you can be sure,the capital is not moving from Nairobi any time soon. And cost of property in Nairobi will continue to rise,simply because there are more people coming into the city every other year than the ones moving out. The only thing that might change is that the middle class will more and more move away from the city center as transport improves (with construction of bypasses,expansion of Thika Road,& introduction of high speed trains)…So any controlled developments (i.e. good security,piped water,electricity,etc.) in areas well served by transport systems will always sell like hot cake. But I would be cautious to buy property in Kileleshwa at inflated prices…The classy trend nowadays (esp for middle class) is to stay further away from the city center,more so if transport systems improve…
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Rank: Elder Joined: 6/20/2007 Posts: 2,037 Location: Lagos, Nigeria
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@BAAK, It is possible for Kenya to construct a new capital. From Nigerian Experience. it is a long term capital intensive project. The way out is to consistently make provision for the construction of the new capital. Nigeria conceived the idea way back in 1976 and the seat of govt moved from Lagos to Abuja 18 years after in 1993. Kenya can have 20 to 30 years plan to relocate to a new central location and build from scratch. GOK can consistently make provision of say 3 Billion KSH or less yearly as capital expenditure to this effect.. Nairobi is choked up and it is getting worse. Now is the time to plan ahead. It is an eyesore for the prestigious Nairobi Hilton Hotel to be located in such a crowded environment at the city center. That place can go for a supermarket. No wonder the most patronized Bata shoe shop is on the ground floor of Nairobi Hilton annex. See my specific response to your concerns in bold. Construct another JKIA Moving the capital does not mean you must contstruct a fantastic airport. Lagos airport is still bigger and better than the new capital Abuja airport. Nairobi will still be the commercial nerve center of Kenya. · Construct another KNH There is nothing wrong to construct a new modern hospital to provide options for Kenyan citizans. It brings specialist health care nearer to the people. People from the coast or eastern region need not travel to Nairobi but to the new capital to receive the urgent needed medical attention. It is a very good thing BAAK. It forces central govt to build additional specialist hospital. · Build another parliament & statehouse This is in order the old parliament and state house can be put to another use or sold out · Build government buildings and parastatals The buildings in Nairobi can be sold out or converted to other commercial or revenue generation uses. · Construct roads,railway station What is wrong about that. Creating options to citizens. · Come up with posh estates like Runda,Karen,Muthaiga,etc where the rich and famous will be willing to stay Govt will only allocate and sell land,private individuals will be more than willing to build up. Foreign embassies can be allocated land free and given dateline to develop their land and relocate. · Construct perfect infrastructure i.e. electricity,water & sewerage facilities · Stay away from UNDP HQ! · & much more… UNDP will be more than willing to construct annex in the new capital,there is nothing wrong in maintaing Nairobi as the HQ. It enables govt to construct infrastructure at their pace from scratch and this becomes the best and the model for other regions. Please be aware that vision comes before provision. Ideas come before implementation It is possible to create a new capital in a centralized location from land carved out from many region at rhe center. It creates sense of unity and spirit of oneness which Kenya desperately need. But it should be a very long term project. But the earlier it starts because of the impsct of inflation on cost implication,the better. It brings the central govt nearer to all regions. With Regards Young, Lagos,Nigeria AFRICAN INVESTOR The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .
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Rank: Member Joined: 11/6/2006 Posts: 276
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1. 16% mortgage expensive????... it's naive to think like that. i just think the writer has never borrowed a facility inside Kenyan borders.
16% is high,ever thought of what the rates are in most developed countries in the world? check the rates for Japan,SA,UK,US etc,then tell us if you are happy to pay the kenyan rates.
Even when funds are borrowed internationally there is the element of commissions and inflation to cater for. the lowest hard currency loan i know is at 8% that i will educate you.
So i think you should buy a house in Japan,SA or UK
2. Majority of nairobi residents can't afford housing; so what..? As a developer you are a businessman first and there is a huge difference between a need and a want,the latter group can afford?
Case in point; at one point mobile phones were sold for 200K and people were charged to receive calls,enter MJ and now housegals own mobile phones and the businessman Safaricom is making mad cash.
cellphone=FMCG
trust me if there was a profit,we would all be there.
3. Whining will not help. ohh...its so expensive...ohhh.... drugieeeesss and foreigners are driving prices up. Are all those in Lavington,Kyuna,Spring Valley,Thigiri,Gigiri,Nyari,Kitisuru,Loresho,Muthaiga are druglords and somali refugees?
Nobody is whinging,we just want the central and local governments to provide some order,its their job. Most countries restrict the activities of non citizens,e.g TZ and the current EAC impasse.
keep waiting.
Wake up and smell the coffee! Hard work pays... with a house in a high class neighbourhood,and that when you are over forty; not when you are at your entry level job. Drop you village standards? Make a decision to what lifestyle you want to lead. And have a critical look at those who have made it! Peter Kenneth on Churchill Live described an accurate arc they followed...started at eastlands,then nairobi west/southb/c/langata and finally to the nice list above. Stop whining for heaven's sake you are making sk appear a losers paradise.
I would like to see you tell a watchman who works 12 hours everyday that hardwork pays so he should keep his eye on the 12m mortgage. Though smart and hard work does pay. There are very many kenyans who work hard e.g Teachers etc. they cannot buy houses in the competitive Nairobi mortgage but I know for a fact that there is an estate in Nakuru called Teachers with very decent houses and was constructed through teachers sacco loan schemes. Its not all about the amount of money,some smarts and collective organisation in society also helps.
housing- do 1000 units for kibera slum upgrading; they sell to the middle class and go back to the slum
4. stop viewing your world with your special brand of lenses! which prices fell? where?
Whats wrong with looking for discounts,its called smart shopping.
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Rank: Elder Joined: 2/16/2007 Posts: 2,114
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There is an Ad in today's DN property pages regarding plots for sale at Makutano Junction.the plots are 50 by 100 ft and each going for Kshs 1M.Are these guys serious?
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Rank: Member Joined: 11/6/2006 Posts: 276
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that is the equivalent of of 0.11 acres. if it possible for commercial devt ***** if subdivided and serviced (before purchase) for residential**** not serviced,residential ** buy any way
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Rank: Veteran Joined: 3/31/2008 Posts: 761 Location: Nairobi
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@chaka, I was also amazed and decided to call the guys. Was met by a mzungu lady's voice. Asked her why they are selling the plots at 1M and she said that coz its near the road and 35km from Nai. Actually I was curious coz I got a 2.25 acre piece which av just subdivided and about to advertise for sale and I had thought I'd sell them at 350k-400k. ..wise as a serpent,humble as a dove When I admire the wonder of a sunset or the beauty of the moon, my soul expands in worship of the Creator.
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Rank: Member Joined: 3/23/2007 Posts: 127
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Hats off TB... good stuff... some more food for thought
1. decongestion: military guys should be the first to leave the city... they take up too much prime land... hurlingham,eastliegh,langata,thika road... wacha waende NE ama RV where their services will be more appreciated
2. transport network: its time to build the roads in the air; picture a road suspended on massive collums running from airport to kangemi...
3. railway network: undergorund or above ground... that is once we decide to build a new city
I would have said something smarter..but the moment passed
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Rank: Member Joined: 9/11/2007 Posts: 62 Location: Nairobi
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@TB et al thanks. I was looking for this information just the previous week.
@Young,I agree we can move the capital to another location and there have been proposed sites including Isiolo which is dead center of nearly everywher in EA. However for the government to invest 3BN a year is a too little. The Hong Kong International was built out at sea in HK in 8 years flat. Part of the process included reclaiming land from the sea as HK did not have any more land.
Dubai is currently building resorts and homes out at sea including the 'Palm Islands' which are almost complete,the 'World' which is about 200 man made islands forming the shape of the world and a third man made island whose name i cannot recall. The thing about these projects is that they began in 2000 and should be complete by the year 2016. The Dubai Govt is investing heavily led by the Crown Prince. I know you all think that Dubai has oil howver you need to note that they estimate that their oil reserves are expected to be depleted by 2016 hence the deadline. Dubai by the end of the project will have increased its coastline by over 2000%. (16years to reclaim many sq km of land from the sea and build housing while we r asleep)
My point is that there is no reason for the govt to invest only 3 Bn a year. With serious focus th gvernment can invest 30Bn a year for 3 years on low cost housing. We have no land to reclaim. By 2013 we will have many people housed. And then how will it be paid for? The taxes you and i pay for,long-term debt instruments,the people who will buy the houses and one radicall idea getting a deficit. A deficit for housing instead of the usual corruption deficit we incur. This will definately go a long way in increasing the sanity in the housing sector and reducing prices. As Marty says thea is demand but its not effective demand. Well with this plan we get more guys able to buy houses.
IF YOU EVER LOSE,MAKE SURE YOU NEVER LOSE THE LESSON!!
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Rank: Elder Joined: 9/12/2006 Posts: 1,554
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Built on a 200 acre tract of land and designed to provide mainly flats and maisonettes each with three bedrooms,the estate strategically located 10kms from the city centre of Nairobi and is adjacent to Embakasi Village. Its infrastructures include tarmac roads with streetlights,a KPLC power sub-station and a water reservoir to enhance electricity and water supply to the estate. Just to get some insight from real estate pple on SK why are these houses being sold below market value,as compared to the neighbouring kcb units that are smaller and squeezed.
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Rank: Elder Joined: 2/16/2007 Posts: 2,114
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@jamani,
Who is the developer?Has he been cleared by NEMA?
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Rank: Elder Joined: 9/12/2006 Posts: 1,554
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@Chaka, The developer was Mugoya,then given to another company i cant recall the name. The owner is NSSF for more check links besides http://www.embakasi.com/ and http://www.nssfkenya.com/real-estate
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Rank: Elder Joined: 2/16/2007 Posts: 2,114
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@jamini,
It appears you are looking at history i.e this estate was bulit and sold out in 2007!
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Rank: Elder Joined: 9/12/2006 Posts: 1,554
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@Chaka,check out your facts,the estate never got completed and it stated selling earlier than 2007,hwever in 2007 they released 600 house to the market at 3.5M or there aout these were snapped up in a day or two day. This June or July another lot is being released at 3.8M for the flats.
My question to the real estate pple of sk why is this estate cheaper than its neighbouring estate thats small in size and has less amenities?
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Rank: Member Joined: 3/23/2007 Posts: 127
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And to round up the mega-fraud re: NSSF/Nyayo Embakasi village…. Ministers and Mpigs have purchased entire block of flats and rows of maisonettes at through away prices…. to answer Jamani’s Qn … the low selling price is for their benefit… perhaps its time to nationalise private property… NSSF/Nyayo Embakasi village should be the first on the list… any one with more than one house should surrender the rest… capitalism has failed Africa… okay so has socialism/ujamaa… time for a hybrid?
I would have said something smarter..but the moment passed
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Rank: Elder Joined: 9/12/2006 Posts: 1,554
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@Fantony
its not whomever its Jamani,I didnt read your attachment,its an old story and am aware of it. Compared to Nyayo embakasi kcb units in embakasi are squeezed (ie the flats).
@Half empty,
Thanks,you filled me,I now understand those prices are manipulated for the big fish to gain later.
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Rank: Member Joined: 6/20/2007 Posts: 25
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The bubble burst a long time ago but estate agents and investors are still burying their heads in the sand like an ostrich. I saw an ad for KSh 17.5m 3br flats on Rhapta Rd,Westy that will be ready in 2010. They're actually opposite my digs,a 3br flat that I luckily bought last year for KSh 6.3m from an emigrating couple. Our compound has lots of parking,a backyard,and lots of mature trees and flowers unlike the new developments. This is because it was done in the 70s when developers weren't stingy with space.
There's a dude who's burnt his fingers doing so-called town houses in Karen on less than half-acre (actually illegal in Karen) and trying to sell them for KSh 37.5m. Needless to say,nobody has bought any of them for over a year now. How can they when a 4br house in Karen on 1 acre with mature trees is going for KSh 30m while a 4br in Old Muthaiga on 0.5 acres is going for KSh 45m?
There are also lots of blocks of flats in Westy where you'll find only 1 or 2 digs with curtains. If no digs in a compound has curtains,then you can conclude that the flats are not yet ready. But if you have only 1 or 2 digs with curtains in a block of 40,what does that mean? It means some naive buyers got suckered. If you don't believe me,just do laps in my hood.
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Rank: Member Joined: 11/6/2006 Posts: 276
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What bubble?
Think of it this way; if you were to sell your your apt today,how much would that fetch you?
Now add a mark up for a new apt with the latest in design,interior decor and modern ammenities.
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Rank: Member Joined: 12/4/2008 Posts: 341 Location: Nairobi
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@Fantony, Thank you for that illuminating piece on NSSF,Mugoya sleaze. Real estate prices are not coming down at least not in the foreseeable future and while we are at it,here are a few home truths.One,no amount of noise-making will bring down interest rates on mortgages. Banks in this market are driven by the maximization of wealth for their shareholders,anything else comes a distant second including helping the growth of regional economies.So,it is safe to say that home ownership is the sole responsibility of the buyer. Second,land the primal resource on which property is developed is held for speculative purposes and is only in the hands of a few profiteering Kenyans.Let me be clear here.There is absolutely nothing wrong with this,after all any investor wants the highest ROI.In the UK for example land prices are regulated and by extension those of property as well. You cannot sell land for more than the determined value. Here government has failed to intervene through policy and law. The truth of the matter is the home buyer is on his own.What is the solution to this problem? Two things.You could pressure your government to intervene by buying back land or through legal and policy means.Downside is Time and Success.(Too much time expended with too little success) Another way is using the tried and tested method(Traditional ways). In the past how did people acquire land in Kenya? Though grabbing(illegal with the risk of repossession and/or jail term,lynching),pooling resources with like-minded Kenyans OR waiting to accumulate the ever elusive millions of dollars/shillings/dirhams et al. Like much of life,the choice is yours...that is my one dirham.... Patience Pays in Guaranteed Checks Patience Pays In Guaranteed Checks.
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Rank: Elder Joined: 6/17/2008 Posts: 23,365 Location: Nairobi
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This thread has made a wonderful read for me since TB started it sometimes back.....kudos guys for the insights!!!!! The chief value of money lies in the fact that one lives in a world in which it is overestimated. ..."Wewe ni mtu mdogo sana....na mwenye amekuandika pia ni mtu mdogo sana!".
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Rank: Member Joined: 11/20/2008 Posts: 367
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The future lies in the satellite towns of Thika,Athi-Mavoko,Limuru,Ngong and Kiambu.
The only challenege is proper planning. By 2017,Nairobi will be unlivable.
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