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Rank: Chief Joined: 3/24/2010 Posts: 6,779 Location: Black Africa
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Renaissance Capital released a report on Monday dubbed, Directional Economics When I’m 67, which said that growth will slow down as a result of a limit in the amount of credit available. The result, said the report, will be reduced household consumption, imported goods and real estate market activity, which will stall growth. “We think positive growth from the return of normal rains will be subdued by tight policy; therefore, we are projecting only a modest recovery in GDP growth to 4.4 per cent in 2012, from 4.3 per cent in 2011 (estimate), with real estate a key near-term risk factor,” it added. http://www.businessdaily...4/-/97utcy/-/index.html
GOD BLESS YOUR LIFE
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Rank: Member Joined: 11/12/2010 Posts: 111 Location: MOMBASA
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mzeekijana wrote:QW25081985 wrote:is there anyway we could make money with this high interest rates before they go away ? QW Tuko pamoja.....niko na 6M kwa mfuko ...I need a bank that can give me a return hata kama ni 15% ..ni wapi huko? In the place I am one can get a loan at a rate of 5% si unaona vile nita make money... Buy loan hapa and plant them huko nyumbani...Wazee tell me which bank is offering cool rates?? Poleni,...I am in the Middle East where one can easily obtain a loan starting from 3% there are banks that offer as low as 2.5%..
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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mzeekijana wrote:mzeekijana wrote:QW25081985 wrote:is there anyway we could make money with this high interest rates before they go away ? QW Tuko pamoja.....niko na 6M kwa mfuko ...I need a bank that can give me a return hata kama ni 15% ..ni wapi huko? In the place I am one can get a loan at a rate of 5% si unaona vile nita make money... Buy loan hapa and plant them huko nyumbani...Wazee tell me which bank is offering cool rates?? Poleni,...I am in the Middle East where one can easily obtain a loan starting from 3% there are banks that offer as low as 2.5%.. @mzeekijana, you are at an advantaged position.. 2.5%, in which currency and for what duration? All the same, take that loan, have good fx risk management system in place, and bring that dough nyumbani. Prof Ndungu will give you 20% on short term assets. Some banks, like hfck and kcb, will even give you better rates than Prof Ndungu if you call them.
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Rank: Elder Joined: 10/9/2008 Posts: 5,389
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Abby wrote:Hi Gentelemen,
Over the weekend, I met officials of Housing Finance in Kitengela where they have opened a shop.
They showed me their mortage rates, current ones. A shocker: you borrow 5M at 97k monthly for 20 years, yet that house can only fetch 20k monthly rent.
Is mortage loan under these conditions of any use really! We are in tough times.
Regards C&PIf you want a three-bedroom apartment on Mombasa Road worth Sh6 million, with a 16.9 per cent mortgage repayable over 20 years at a monthly payment of about Sh96,030, you would need to earn at least Sh280,000 a month. http://www.nation.co.ke/lifestyle/DN2/High-mortgage-rates-make--houses-unaffordable-for-many-/-/957860/2156860/-/hpqwgb/-/index.html
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Rank: Member Joined: 12/16/2008 Posts: 111
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Our Kenyan mortgage interest rates are quite prohibitive.
How much interest does the government backed or employer backed mortgage scheme currently attract?
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Rank: Veteran Joined: 1/4/2010 Posts: 1,668 Location: nairobi
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property/land increases value at a rate of 20% annually around nairobi. If you add the rent earned per year plus the increase in value yearly, the bank loans still look feasible. Land value affects inflation rate which affects bank interest rates. As Iron Sharpens Iron, So one Man Sharpens Another.
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Rank: Elder Joined: 6/2/2011 Posts: 4,818 Location: -1.2107, 36.8831
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 Receive with simplicity everything that happens to you.” ― Rashi
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Rank: Elder Joined: 6/2/2011 Posts: 4,818 Location: -1.2107, 36.8831
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 Receive with simplicity everything that happens to you.” ― Rashi
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Rank: Elder Joined: 5/27/2008 Posts: 3,760
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1. April 2013 rates. 2. These are base rates which an average wazuan will never get.
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Good info. What's the source?
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Rank: Elder Joined: 6/2/2011 Posts: 4,818 Location: -1.2107, 36.8831
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@GG, the updated rates (as at 23rd January 2014) are in post #48. @Mwekezaji, HassConsult quarterly reports (Mortgages Special Report), you can get them in their website as pdf! What is making me wonder is that a 5M/- mortage at 15% for 12 years comes to 75K/- monthly for 10.8M/- Total. No Wonder Housing is EXPENSIVE in Kenya! Receive with simplicity everything that happens to you.” ― Rashi
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Rank: New-farer Joined: 1/8/2014 Posts: 77
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@dunkang Africa Development Bank ? Simplicity is the utmost sophistication.
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Rank: Chief Joined: 1/3/2007 Posts: 18,124 Location: Nairobi
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Buy To Let [Buy To Rent] a completed unit is a fool's game in Kenya if you need to borrow at least 50% of your requirements. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 9/14/2011 Posts: 834 Location: nairobi
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a4architect.com wrote:property/land increases value at a rate of 20% annually around nairobi.
If you add the rent earned per year plus the increase in value yearly, the bank loans still look feasible.
Land value affects inflation rate which affects bank interest rates. isn't 20% appreciation in value especially for property/buildings too high? can i buy an apartment in Kileleshwa for sh 12million and assume it will appreciate in value at 20%? i doubt it as i think the sh 12million is probably overpriced and there could be a real risk in future of values not appreciating at all in any case, how many years can it go up at that rate?
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Rank: Veteran Joined: 1/4/2010 Posts: 1,668 Location: nairobi
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@heri, land appreciates at 20% annually and above. Developed land appreciates much slower, maybe around 5 to 8% annually. The rate of appreciation will depend if you have bought underpriced or over priced. If you bought overpriced, the property might even depreciate in value over the years. In Kenya, most value is gotten through the comparison method. There are other methods such as the architectural method whereby you check on the value of construction vis a vis value of land. The land should be around 20% of total construction cost. I use it for my real estate investments and it works well. For example, the southern bypass hotel whereby assuming the building can accommodate kes 40m of profitable construction, the land should therefore cost 40m x 20%=kes 8m. The purchase price should not hit 8m for the land. http://www.a4architect.c...ects-vs-stock-exchange/
By mid this year, land price will be over 8m. By Mid next year, the price will double, to be like as seen along the Eastern Bypass. This is the method i use to gauge if land price is over valued. If land is over valued, this means that the return on investment will not be possible. The international benchmark for unviable return on investment is 15 years. Land that can return on less than 15 years is viable. The hotel investment, for example, has a return on investment of 5 years on average. Check land price appreciation analysis for cbd lands here http://www.a4architect.c...nd-prices-appreciation/
The land price in CBD is still undervalued at the current kes 300m per acre till it reaches 2billion as the economy grows. As Iron Sharpens Iron, So one Man Sharpens Another.
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Rank: Elder Joined: 6/2/2011 Posts: 4,818 Location: -1.2107, 36.8831
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Mist wrote:@dunkang Africa Development Bank ? I just snapped the table the way it's presented in the HassConsult Report. I have not done any research (and i don't intend to). Thanks though for the heads up. Anyone intending to take a mortgage will surely look at Africa Development Bank! Thanks again! Receive with simplicity everything that happens to you.” ― Rashi
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Rank: Chief Joined: 1/3/2007 Posts: 18,124 Location: Nairobi
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Warren Buffett said any sector cannot grow faster than the economy for an extended period of time or it will become larger than the economy... which it cannot... Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 6/2/2011 Posts: 4,818 Location: -1.2107, 36.8831
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VituVingiSana wrote:Warren Buffett said any sector cannot grow faster than the economy for an extended period of time or it will become larger than the economy... which it cannot... How much of the Kenyan Economy is actually documented/recorded. Most of Africa's economy is largely informal hence may be growing faster than the formal well documented businesses. However, the housing prices and annual increment in Kenya is simply ABSURD. Receive with simplicity everything that happens to you.” ― Rashi
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Rank: New-farer Joined: 8/25/2012 Posts: 32
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a4architect.com wrote:@heri, land appreciates at 20% annually and above. Developed land appreciates much slower, maybe around 5 to 8% annually. The rate of appreciation will depend if you have bought underpriced or over priced. If you bought overpriced, the property might even depreciate in value over the years. In Kenya, most value is gotten through the comparison method. There are other methods such as the architectural method whereby you check on the value of construction vis a vis value of land.<font color='red'> The land should be around 20% of total construction cost,</font>. I use it for my real estate investments and it works well. For example, the southern bypass hotel whereby assuming the building can accommodate kes 40m of profitable construction, the land should therefore cost 40m x 20%=kes 8m. The purchase price should not hit 8m for the land. http://www.a4architect.c...ects-vs-stock-exchange/
By mid this year, land price will be over 8m. By Mid next year, the price will double, to be like as seen along the Eastern Bypass. This is the method i use to gauge if land price is over valued. If land is over valued, this means that the return on investment will not be possible. The international benchmark for unviable return on investment is 15 years. Land that can return on less than 15 years is viable. The hotel investment, for example, has a return on investment of 5 years on average. Check land price appreciation analysis for cbd lands here http://www.a4architect.c...nd-prices-appreciation/
The land price in CBD is still undervalued at the current kes 300m per acre till it reaches 2billion as the economy grows. Even in expensive suburbs such as Runda, Karen, Kilimani etc. would 20 % count.
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Rank: Veteran Joined: 1/4/2010 Posts: 1,668 Location: nairobi
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in karen and runda, maximum construction, 1000m2, costs 50m per 0.5ac. 20% of this is 10m. Financially, the land should cost 10m. Its overpriced to 40m due to fulfilment of other demands apart from financial e.g prestige etc. As Iron Sharpens Iron, So one Man Sharpens Another.
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