Yes the pirate money and drug proceeds are a factor, as we've seen these people can come in and do what they want at will. You think they'll buy land in Mogandishu? Also as recent news shows, "Judiciary saga", there's lots of government money leaking out into the economy through corruption. All these things create a cascading effect with it's own inertia. Since prices are expected to go up, people are willing to pay increasingly higher prices. This will continue until people can't afford or burn their fingers. The end is not near as long as the conditions remain the same.Don't hold your breath, get what you can afford and what fits with your investment plan.

People are willing to pay any price so as to speculate. I know people who paid upto 16 million for 7.8acres in Konza because the land is just opposite the fence its kenyans who are driving the prices up not pirates. Assume konza kicks off and the govt enforces the 10km buffer zone and possibly buys the land they will still be compensated at not more than 300K an acre KAA/govt also wants a piece for an airport there they will definitely be buying at not more than 300K. Some of these guyz have been trying to dispose off land there but the land is still at 5-6M for the 7.8 acres its ok to speculate but lets be careful where our money is going

I also doubt there will be a bubble burst soon. Maybe a cooling off of the sector for as it is it's crazy na sio Nairobi pekee!

It is also true that rural-urban migration is very high. Mzee Jomo told Waafrika to go back to the rural areas but it seems this call eventually failed. People want to live in the cities, work in the cities, retire in the cities BUT get buried in the rural areas.

They still want to own(through inheritance) land in the shags though they don't farm it(for security for loans? for rental income?). Thus land is fragmenting further and agricultural production decreasing in some areas.

Culturally, we've changed too. In the past, the whole family would construct around their father's house. It was culturally accepted. Today, any young man who sticks with his father is frowned upon as lazy. The society tells that lad "Go rent and save and then buy a plot in Kamulu/by-pass/Kitengela..." thus you find these fellows whose shags is within 40kms from Nairobi joining the bandwagon that buys those Kisaju plots!

Is there a remedy? Maybe what @architect suggests could do. Tax capital gains heavily and let such funds go to county govts for infrastructure dvpt. But that will be fraught with challenges like corruption in administering it. But we should try.

Someone had suggested infrastructure. Great. Hope this reduces rural-urban migration. Rural folks see urbanites' liquidity and hasten to join them. Maybe if agriculture paid better more of us will stay in rural areas.

But there is the issue of increased funds. I don't think this is solely as a result of Piracy money but maybe Kenyans are just getting richer. With lenders becoming more welcoming to borrowers, the market can only get crazier as rel estate is the investment of choice for many. Is it an issue also of financial education?

Okay, what happened in this city?
There is this controversial piece of land in Westland that was transfered as follows;
- 1962 for 125,000/-
- Sep 2002 for 1,000,000/-
- Dec 2009 for 130,000,000/-

So this land price grew 800% in 40 years (not even considering 1990-1994 goldenberg super inflation), then in 7 years, KABOOM, 13,000%. Kwani what big thing happened in Westland between 2002-2009 that wasn't happening between 1962-2002?

http://www.nation.co.ke/.../-/5w68vyz/-/index.html

Wajamaneni, Ngilu is at the lands office!!!!!!!!!!!!!

@nabwires concept could be true in that after collapse of stockbrokers eg nyaga et al with peoples deposits, other investment avenues were sought hence people flocking in to land.