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Property bubble
Mo
#1 Posted : Wednesday, August 10, 2011 2:08:59 PM
Rank: Member


Joined: 9/21/2007
Posts: 326
Just about everyone I know has a plot or an apartment around the Nairobi metropolis solely held for appreciation and eventual transfer to tne next "dumb fool". Pple have divested from the NSE and invested in plots heavily. With the advent of county governments and the eventual fall in rental yields from property around Nairobi are we staring at a property bubble in say 4-5 years time?
Speak your truth quietly and clearly; and listen to others, even the dull and the ignorant; they too have their story.
Elder
#2 Posted : Wednesday, August 10, 2011 3:18:53 PM
Rank: Elder


Joined: 9/7/2010
Posts: 2,148
Location: elderville
There is already a thread on this.
He who can express in words the ardour of his love, has but little love to express. - Petrach, Son. (That men by various ways arrive at the same end. - Montaigne, The Essays of.)
2012
#3 Posted : Wednesday, August 10, 2011 3:58:51 PM
Rank: Elder


Joined: 12/9/2009
Posts: 6,241
Location: Nairobi
Mo wrote:
With the advent of county governments and the eventual fall in rental yields from property around Nairobi are we staring at a property bubble in say 4-5 years time?


property bubble will not burst in Nairobi and especially not on land - maybe when correction on the overpriced apartments happens it will hurt a few employees but not a burst.

One thing is clear about Kenya, taxes are for enriching thieves.
Lolest!
#4 Posted : Wednesday, August 10, 2011 4:17:20 PM
Rank: Elder


Joined: 3/18/2011
Posts: 11,393
Location: Kianjokoma
Kenya is increasingly becoming an urban society. We may see some downward correction in 5years but not a burst. Look at the growing middle class and youll understand what i mean. Kenyans are getting more educated and also getting better jobs which are unfortunately in key towns.
Laughing out loudly smile Applause d'oh! Sad Drool Liar Shame on you Pray
sanity
#5 Posted : Wednesday, August 10, 2011 5:18:49 PM
Rank: Member


Joined: 1/24/2011
Posts: 406
Location: Nairobi,Kenya
@Mo ,by property burst do you mean that land and houses in nbi will cost less?....an apartment costing 8.5m will cost 5m after the burst?..i highly doubt.
Hope is not a strategy
dunkang
#6 Posted : Thursday, April 04, 2019 3:00:55 AM
Rank: Elder


Joined: 6/2/2011
Posts: 4,782
Location: -1.2107, 36.8831
sanity wrote:
@Mo ,by property burst do you mean that land and houses in nbi will cost less?....an apartment costing 8.5m will cost 5m after the burst?..i highly doubt.

8 years later
Receive with simplicity everything that happens to you.” ― Rashi

Angelica _ann
#7 Posted : Thursday, April 04, 2019 4:53:06 AM
Rank: Elder


Joined: 12/7/2012
Posts: 10,257
dunkang wrote:
sanity wrote:
@Mo ,by property burst do you mean that land and houses in nbi will cost less?....an apartment costing 8.5m will cost 5m after the burst?..i highly doubt.

8 years later


I don't think there is a burst, just rate cap effect that has slowed growth in the property!!!
In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
MugundaMan
#8 Posted : Thursday, April 04, 2019 6:27:04 PM
Rank: Veteran


Joined: 1/8/2018
Posts: 1,700
Location: DC (Dustbowl County)
in 2049 some will still be talking of an impending property bust. Let them wait tu smile Nairobi today is like Hong Kong in 1964. The superboom to come has not even started yet given the perfect storm of socio-economic factors that God has divinely blessed us with
* Massive well educated technocrat and entrepreneurial middle class that is growing by leaps and bounds each year
* Irreplaceable strategic location. Muchina knows what he is doing when he makes Kenya (and not the more established South Africa, or the more populous Nigeria) ground zero of his push into Africa. The Kenya-Ethiopia corridor is the one to watch in Africa for the next 50 years
* Beautiful weather and abundant natural resources. Geothermal leader in Africa, Solar is climbing fast, We will soon be the number one Avocado exporting nation in the world in the coming 20 years and we haven't even opened up our oil taps jameni
* Very young well educated population which will spur domestic demand for decades to come
* Anti-Corruption push has true political will for the first time in Kenya's history. This is a strategic shift that will cause a structural change in the way our dynamic economy operates.

The future is bright in Kenya. Except for the perennial whiners and the lazy pessimists of course.
"The fool says in his heart, "There is no God." - Psalm 14:1
Dustbowl County is the Future of Kenya.
**1700 posts = Adios (for real this time!)**
MatataMingi
#9 Posted : Tuesday, April 09, 2019 3:34:01 PM
Rank: Member


Joined: 11/17/2009
Posts: 334
Location: Where everyone knows you
@ MugundaMan.

I agree with most of your positive points above.

However, our downfall will be the entrenched HIGH level corruption.

I cannot see any REAL action in that area.

SAD.VERY SAD.
Horton
#10 Posted : Wednesday, April 10, 2019 4:26:02 AM
Rank: Veteran


Joined: 8/30/2007
Posts: 1,389
Location: Nairobi
MatataMingi wrote:
@ MugundaMan.

I agree with most of your positive points above.

However, our downfall will be the entrenched HIGH level corruption.

I cannot see any REAL action in that area.

SAD.VERY SAD.


So in my opinion we are no where near bubble territory and real estate especially in good areas continues to do well. Some areas do struggle but that’s normal and there are reasons to this, it wouldn’t be fair to classify all areas as “struggling”

-Growing Economy, even if people put a negative spin, there is generally a positive economic growth over a 10year period hence more and more Kenyans graduating to the coveted middle class.

- Growing Population as population grows so does housing demand this is obvious. Putting this in perspective, we were 40mn just the other day only to spontaneously jump to 50mn people. Considering the high rates of rural to urban migration, the demand in general should grow over a 10year span.

-Supply vs Demand granted now we have a growth in structured real estate developers (Cytonn, VAAL etc etc) and also a growth in amateur developers so this is sort of bridging the gap however considering there was already a shortfall, it may take a decade or 2 with high levels of construction to catch up. Granted some areas have hit their saturation point and also developers are building bigger buildings with smaller units to contain costs but these are also running out fast (ask VAAL about their DIVINE development in Riverside, I expect Elite in Westlands Road to have a similar fate. They launched at 8.8m I can see these going to atleast 15m

DC there is an oversupply for now but this is because of:
1. Limited market
2. Amateur developers ran a mock with some of these very poorly designed, poorly located properties case in point some apartments in Athi River I had gone to see, they were very well built but You are immediately greeted by the smell of fresh meat as it’s pretty close to KMC their name escapes me.

Other arguments for Parklands & General Mathenge struggling. This is because of :
1. Limited demographic renters The muhindi client base is quite limited as they do prefer this area, most of these guys here prefer to buy their own houses and they do love to haggle do getting good yields is quite a mission 😂😂
2. General Mathenge apartments/houses priced over ambitiously. One General Mathenge 4 bed apartment roughly 5000 SQF was priced at 80m + where as a stand-alone new house on half acre in leafy Lower Kabete was going for 60m a few years ago. I had a potential client I tried to convince to buy the Lower Kabete house but he chose the One General Mathenge for reasons known only to himself. I know quite a few properties still unsold on this road and developers are dropping their prices to more realistic valuations. This by no means is classified a bubble burst rather just bringing overzealous developers off their high horses.

3. Market research not sure if this is done correctly or is done at all before developing apartments or offices. Eg Britam towers, UAP building. These guys all built Grade A Office’s at the same time for the same limited clientele causing demand for land and prices to sky rocket. I don’t think proper research was done before building these, the same can be said about malls in Kenya. Some of these developers just build because it was the fashionable fad of the day and not necessarily trying to meet a need. Which is sorta sad considering that this is resources they could have put elsewhere to have a positive twist on people’s lives and also generate income.


I own shares in KCB,CYTONN, BRK.B, Almasi Beverages and a few other private small businesses
MugundaMan
#11 Posted : Wednesday, April 10, 2019 4:40:56 AM
Rank: Veteran


Joined: 1/8/2018
Posts: 1,700
Location: DC (Dustbowl County)
Horton wrote:


DC there is an oversupply for now but this is because of:
1. Limited market
2. Amateur developers ran a mock with some of these very poorly designed, poorly located properties case in point some apartments in Athi River I had gone to see, they were very well built but You are immediately greeted by the smell of fresh meat as it’s pretty close to KMC their name escapes me.


1. Where did you get the assertion that there is "an oversupply in DC" from? Please back with credible facts, statistics and evidence. Then contrast with your earlier statement that there is a general housing deficit that will take up to two decades to sate. Clearly you are talking out of both sides of your mouth hapa, papa ama?
2. "poorly designed, poorly located?" Laughing out loudly What parts of DC have you been visiting? Give examples of the same (poorly designed poorly located houses) if you can.
3. Athi River is NOT in DC, FYI smile
"The fool says in his heart, "There is no God." - Psalm 14:1
Dustbowl County is the Future of Kenya.
**1700 posts = Adios (for real this time!)**
wukan
#12 Posted : Wednesday, April 10, 2019 9:55:39 AM
Rank: Veteran


Joined: 11/13/2015
Posts: 1,054

Quote:
Struggling Uchumi Supermarkets’ recent sale of a 20-acre piece of land in Roysambu, Nairobi, to a church group for Sh2.8 billion has received a huge blow.

Judges Philip Waki, Mohammed Warsame and Agnes Murgor have refused to strike out a case that Sidhi Investments filed against Uchumi in 2005, claiming that the retailer reneged on a sale deal after receiving 10 per cent payment for the land.

During Uchumi’s first cash crunch in 2005, the retail chain set its sights on selling the Roysambu land to ease its financial troubles.

SALE DEAL

On March 9, 2005, Sidhi Investments offered to buy the land for Sh118 million, which Uchumi was satisfied with.

The firm agreed to pay a 10 per cent deposit for the land and wrote a Sh11.8 million cheque in favour of Uchumi.

But two days later Uchumi advertised the land for sale and Sidhi Investments decided to sue.
https://www.nation.co.ke...3934-ujyvy5z/index.html


Property is all about location, bubble is for guys who bought in the wrong location. Uchumi must be having a huge seller's remorse 2.8b to 118m. Don't wait to buy, buy and wait.
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