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Insightful take on Nairobi Real Estate
VituVingiSana
#61 Posted : Saturday, September 03, 2011 10:16:42 AM
Rank: Chief


Joined: 1/3/2007
Posts: 14,908
Location: Nairobi
Part of the increase in prices may be attributed to speculation. In any event, I am staying out since I don't have the ability (or skill) to use vacant land for anything else but 'hold' it.

If I could buy a decent farm with a steady water source at a reasonable price... I would rent it out. The rent would determine how much I would pay for the land.

Unless you can use it - reducing the holding cost - it is tough especially if the funds are BORROWED. Today banks are lending at 16% (or more) which means the MINIMUM the land has to appreciate is 16% per annum + taxes + other incidentals.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
tony stark
#62 Posted : Saturday, September 03, 2011 4:23:22 PM
Rank: Veteran


Joined: 7/8/2008
Posts: 792
@ Vitu was just looking at old thread as I re evaluate my holdings. I realized I might be overlooking real estate. I am re questioning this bubble scenario every one is saying we are in. Growing economy, rural urban migration, is just going to increase demand especially in middle and lower income housing.
My plan get a mortgage which I can definitely channel money I have been pumping into the NSE into the mortgage and get a tenant to pump in the rest. Buying a 4.8 m house get a 3.8 m mortgage. Repayment come to 50K rent comes to 30 K which I will be pumping direct into the principal and repayment will be done in 5 years as opposed to 15 years. At the end i will have paid around 4.8 m + my initial deposit of 1m total investment is 5.8m. The key is to pay into the principal from the get go and this reduces the interest you have to pay.
@ nabwire there are only 16000 mortgages in Kenya. Don't expect to see a flood of bank repos in kenya. Most property is bought cash and through sacco loans. I have been looking through HFCK private treaty properties (Your bank repo) and I can tell you good deals are rare and usually due to other reasons not foreclosure. Surprisingly enough the property on foreclosure are usually more expensive.
My 2 cents
VituVingiSana
#63 Posted : Saturday, September 03, 2011 4:39:03 PM
Rank: Chief


Joined: 1/3/2007
Posts: 14,908
Location: Nairobi
@TS - A house for 4.8mn yielding 30,000/- rent =

360,000 / 4,800,000 = 7.5% is not bad. Please factor in losses/repairs/vacancies as well which will reduce the 7.5% to 6.5%

Growing Economy - Yes
Rural-Urban Migration - Not for 30,000/- rent but cheaper accommodation unless you rent a room by room

BTW, your Mortgage Interest is higher than 50,000/month @ 16% for 3.8mn. Also add closing costs + other annual fees. You will also need to pay something on the Principal annually.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
tony stark
#64 Posted : Monday, September 05, 2011 9:22:13 AM
Rank: Veteran


Joined: 7/8/2008
Posts: 792
@ Vitu ... I bought it off plan. The price he is selling when complete is 5.5-5.6m. So the return is really not that good for the people who buy then.
I would also include rural urban since the rural "rich" are also moving to Nairobi or trying to set up base in Nairobi also. I know a few I was a raised in shagz and Nai.
The mortgage is at 13.5% with HFCK and there are ways to reduce/ negotiate the rate. If you have a crossover account with HFCK you get discounts on the rate, commitment fees etc.
On the closing cost I negotiated the rate with the valuer, tried with the lawyer and got a minuscule/ token discount. The argument I put forward to them is I'm young under 30, im the first in my cohort of professional friends to foray into mortgages, giving me a discount will ensure i refer my colleagues to them. Worked well with the valuer the lawyer was well established and i guess with lots of clients so was not impressed by my pitch. But i agree closing cost come to 10% of the sale price.
In retrospect I think I should have looked at other forms of mortgage eg kusco mortgage loans, sharia loans etc. Lessons learnt.
VituVingiSana
#65 Posted : Monday, September 05, 2011 11:13:47 AM
Rank: Chief


Joined: 1/3/2007
Posts: 14,908
Location: Nairobi
@TS - Are you sure the Mortgage is at 13.5% (below what HFCK would make on a T-Bond?)

Banks is Kenya have a bad habit which CBK refuses to correct/fix... The interest should be APR-based not nominal rate.

What is a Crossover Account?

(As I understand it) Doesn't that imply that you place money with them at a lower rate that they 'lend' to you? You lose the difference between what they pay (less 15% WTax) & what you pay them!

Also a cost to consider is that you paid a deposit - those funds have a cost until the house is delivered to you.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
StatMeister
#66 Posted : Monday, September 05, 2011 11:19:37 AM
Rank: Veteran


Joined: 5/23/2010
Posts: 868
Location: La Islas Galápagos
While the bubble burst has been prophesied over and over again, it will not occur on itself since due to its illiquidity and inflation hedging makes it more attractive to many people to hold.

Under normal circumstances, house prices may in general hold since people have to live somewhere one way or another.

But under abnormal circumstances, house prices can be pushed down, and when prices start going down, buyers always prefer to wait a little longer to buy cheaper . . .

These are the signs you need to know when to quit real estate – when banks start foreclosure. Banks have neither the strategy nor the motivation to own a repossessed house, and will sell at a discount to get it off their books (and come after the customer for the deficit). When one bank does it, the other banks find themselves in a very unfavourable situation, and respond by selling reposed houses at even juicier and demanding higher deposits for new owners.

And then it becomes just another NSE.

I hope am wrong
A bad day fishing is better than a good day at work
youcan'tstopusnow
#67 Posted : Tuesday, September 06, 2011 10:31:38 PM
Rank: Chief


Joined: 3/24/2010
Posts: 6,779
Location: Black Africa
Woman gets Sh750m for stake in prime city estate. There's a payday if you never saw one http://businessdailyafri...46/-/t0tyj1/-/index.html
GOD BLESS YOUR LIFE
murchr
#68 Posted : Monday, August 17, 2015 2:43:58 AM
Rank: Elder


Joined: 2/26/2012
Posts: 13,589
I had to revive this to ask a few questions on how foreclosures are handled in Kenya.

1. When a borrower fails to pay off his mortgage, how does the bank go on to recover their money and dispose the property? (Do they set a price or auction to the highest bidder?)

2. How do the new laws hinder the process?
"There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
.
wukan
#69 Posted : Monday, May 07, 2018 3:14:20 PM
Rank: Member


Joined: 11/13/2015
Posts: 867
Downtown is undergoing some serious change

Quote:

Traders suffered losses on Monday after a Nairobi building at the centre of an ownership dispute was demolished.

The building on Ronald Ngala Street housed about 30 stalls stocked with clothes, shoes and beauty products.

The affected traders blamed the county saying officers should have allowed them to remove their property.

But City Hall Director of Operations Peter Mbaya said inspectorate officers had nothing to do with the demolition.

"Police had a court order to bring the building down," Mbaya said.

Central OCPD Robinson Thuku said they implemented a court order produced by a developer who wants to put up a building at the same spot.

"The case had been in court for almost five years. After winning, the developer acquired an order to demolish the building."

https://www.the-star.co....n-city-building_c1754754
MugundaMan
#70 Posted : Monday, May 07, 2018 3:54:56 PM
Rank: Veteran


Joined: 1/8/2018
Posts: 926
Location: Future Dustbowl Citizen
Hehehe 9 years on those writing kizungu Mingi articles are still trying to decipher the real estate conundrum. Look here rafikis, there is enough migunda for each and every single Kenyan in this beautiful country. Most if not almost all of you have at least one somewhere. Unless you are an IDP, Chokora or are disabled. Kenya is not Lavington and Runda. Create your own Kileleshwa in the bush. You can all afford those plots I see going in Nanyuki, marareni, malaa, emali, kajiado etc for well under 100k. Ubaya ya wakenya ni kulia tu ngweeeeeeeeeh from dusk to dawn about phantom problems and endless baseless fears. Reminds me of the Jomo joke about someone with land being given a serekali jembe asking "but who will do the digging?" Bure tu. Buy land and develop it rafikis. If you can afford those smart phones I see you with wagging tongues for hours in polojo daily, you surely can afford a measly plot in Malaa on which to slowly build.
"The best investment on earth is earth"
wukan
#71 Posted : Friday, November 02, 2018 12:55:52 PM
Rank: Member


Joined: 11/13/2015
Posts: 867
Quote:
Westlands suburb showing the strongest performance over the year with prices in the area improving by 7.9 per cent as it undergoes the “rediscovery” phase of the urban regeneration cycle - a result of high income earners moving back to neighborhoods more central to the city

Westlands area is additionally undergoing the “rediscovery” phase of the urban regeneration cycle which is the result of high income earners moving back to neighborhoods that had previously seen an exodus of these tier of residents.

“Classically, in urban markets, areas that are initially populated by high-income earners are often, over time, developed in ways that lead to a shift in the mix of the population, with middle income earners beginning to move into the area. This can cause flight by the elite, to the next upmarket beauty spot. As the high-end residents vacate, property becomes further developed, often at higher density, and the area will see an influx of lower income earners.
This takes the cycle on a further stage, as middle-income earners also seek to relocate. Finally a younger generation of middle income earners comes to develop this area making it get 'rediscovered',” added Ms. Hassanali




Quote:
Westlands' performance is benefiting from the area becoming a melting pot for international hotel brands setting up in the area as they seek to tap into Nairobi's growing market for Meetings, Incentives, Conferences, and Exhibitions (MICE) tourism.
The increased growth of MICE tourism is trickling down to the apartment, detached and semi-detached housing
market in the Westlands suburb as some visitors opt to stay in serviced apartments or houses that are in close vicinity to the hotels where major conferences are taking place.


From Hassconsult Q3 index report. I can confirmsmile smile
MugundaMan
#72 Posted : Friday, November 02, 2018 1:13:45 PM
Rank: Veteran


Joined: 1/8/2018
Posts: 926
Location: Future Dustbowl Citizen
wukan wrote:
Quote:
Westlands suburb showing the strongest performance over the year with prices in the area improving by 7.9 per cent as it undergoes the “rediscovery” phase of the urban regeneration cycle - a result of high income earners moving back to neighborhoods more central to the city

Westlands area is additionally undergoing the “rediscovery” phase of the urban regeneration cycle which is the result of high income earners moving back to neighborhoods that had previously seen an exodus of these tier of residents.

“Classically, in urban markets, areas that are initially populated by high-income earners are often, over time, developed in ways that lead to a shift in the mix of the population, with middle income earners beginning to move into the area. This can cause flight by the elite, to the next upmarket beauty spot. As the high-end residents vacate, property becomes further developed, often at higher density, and the area will see an influx of lower income earners.
This takes the cycle on a further stage, as middle-income earners also seek to relocate. Finally a younger generation of middle income earners comes to develop this area making it get 'rediscovered',” added Ms. Hassanali




Quote:
Westlands' performance is benefiting from the area becoming a melting pot for international hotel brands setting up in the area as they seek to tap into Nairobi's growing market for Meetings, Incentives, Conferences, and Exhibitions (MICE) tourism.
The increased growth of MICE tourism is trickling down to the apartment, detached and semi-detached housing
market in the Westlands suburb as some visitors opt to stay in serviced apartments or houses that are in close vicinity to the hotels where major conferences are taking place.


From Hassconsult Q3 index report. I can confirmsmile smile


Na Kirinyaga Rd je? Laughing out loudly Laughing out loudly

Westlands an acre is going for easily 300 metre and above. The "average non-corrupt Joe" under 45 cannot obviously afford that, so it is a waste of time to preach the glories of Westlands on Wazoo.
"The best investment on earth is earth"
wukan
#73 Posted : Friday, November 02, 2018 1:30:24 PM
Rank: Member


Joined: 11/13/2015
Posts: 867
MugundaMan wrote:


Na Kirinyaga Rd je? Laughing out loudly Laughing out loudly

Westlands an acre is going for easily 300 metre and above. The "average non-corrupt Joe" under 45 cannot obviously afford that, so it is a waste of time to preach the glories of Westlands on Wazoo.


I was on Kirinyaga road just the other day behind that road the area where the grogan mechanics operate there is some huge building coming up there must be like over 10 floors. I was shocked to see that kind of investment in that area. Some investors are clearly seeing the potential of that area. Further up the road the chinese are doing some serious road construction for their ngara project.
Kate_Mbarire
#74 Posted : Friday, November 02, 2018 2:09:33 PM
Rank: New-farer


Joined: 9/4/2018
Posts: 51
Location: Nairobi
wukan wrote:
MugundaMan wrote:


Na Kirinyaga Rd je? Laughing out loudly Laughing out loudly

Westlands an acre is going for easily 300 metre and above. The "average non-corrupt Joe" under 45 cannot obviously afford that, so it is a waste of time to preach the glories of Westlands on Wazoo.


I was on Kirinyaga road just the other day behind that road the area where the grogan mechanics operate there is some huge building coming up there must be like over 10 floors. I was shocked to see that kind of investment in that area. Some investors are clearly seeing the potential of that area. Further up the road the chinese are doing some serious road construction for their ngara project.


Where where Wukan?is this office space or lodging?
The high-rise on kirinyaga road?
Interesting...
wukan
#75 Posted : Friday, November 02, 2018 3:19:00 PM
Rank: Member


Joined: 11/13/2015
Posts: 867
Kate_Mbarire wrote:
wukan wrote:
MugundaMan wrote:


Na Kirinyaga Rd je? Laughing out loudly Laughing out loudly

Westlands an acre is going for easily 300 metre and above. The "average non-corrupt Joe" under 45 cannot obviously afford that, so it is a waste of time to preach the glories of Westlands on Wazoo.


I was on Kirinyaga road just the other day behind that road the area where the grogan mechanics operate there is some huge building coming up there must be like over 10 floors. I was shocked to see that kind of investment in that area. Some investors are clearly seeing the potential of that area. Further up the road the chinese are doing some serious road construction for their ngara project.


Where where Wukan?is this office space or lodging?
The high-rise on kirinyaga road?
Interesting...


It's a shithole street full of garbage, auto spares shops and mechanics I think it's called lower kirinyaga road. I had taken my jalopy for repairs and got to walk the streets. I was just surprised to see a high rise coming up there.
MugundaMan
#76 Posted : Friday, November 02, 2018 4:29:31 PM
Rank: Veteran


Joined: 1/8/2018
Posts: 926
Location: Future Dustbowl Citizen
wukan wrote:
MugundaMan wrote:


Na Kirinyaga Rd je? Laughing out loudly Laughing out loudly

Westlands an acre is going for easily 300 metre and above. The "average non-corrupt Joe" under 45 cannot obviously afford that, so it is a waste of time to preach the glories of Westlands on Wazoo.


I was on Kirinyaga road just the other day behind that road the area where the grogan mechanics operate there is some huge building coming up there must be like over 10 floors. I was shocked to see that kind of investment in that area. Some investors are clearly seeing the potential of that area. Further up the road the chinese are doing some serious road construction for their ngara project.


The problem with investing in a down at the heels area is that particular strategy is built on the developer's HOPE alone, which IMHO is not a good basis upon which to invest. Some areas just have a bad "taste" in the mouths of the average Kenyan. If you say for example you are going to put a luxury highrise in the middle of Dandora dumpsite, someone may think you have been smoking some bad bangi mbichi.
"The best investment on earth is earth"
tony stark
#77 Posted : Monday, November 05, 2018 4:41:53 PM
Rank: Veteran


Joined: 7/8/2008
Posts: 792
MugundaMan wrote:
wukan wrote:
MugundaMan wrote:


Na Kirinyaga Rd je? Laughing out loudly Laughing out loudly

Westlands an acre is going for easily 300 metre and above. The "average non-corrupt Joe" under 45 cannot obviously afford that, so it is a waste of time to preach the glories of Westlands on Wazoo.


I was on Kirinyaga road just the other day behind that road the area where the grogan mechanics operate there is some huge building coming up there must be like over 10 floors. I was shocked to see that kind of investment in that area. Some investors are clearly seeing the potential of that area. Further up the road the chinese are doing some serious road construction for their ngara project.


The problem with investing in a down at the heels area is that particular strategy is built on the developer's HOPE alone, which IMHO is not a good basis upon which to invest. Some areas just have a bad "taste" in the mouths of the average Kenyan. If you say for example you are going to put a luxury highrise in the middle of Dandora dumpsite, someone may think you have been smoking some bad bangi mbichi.

Laughing out loudly Laughing out loudly Laughing out loudly Laughing out loudly Laughing out loudly
Wewe wachana na bhangi. Use delusions of granduer as the excuse.
Kirinyaga road is prime for redicovery. It is next to a dirty river that can be cleaned up. That part of nairobi river even has a part ... I think it called michuki park.
Once the mechanics are kicked out... eventuality this place will blow up.
Right now the are has several AirBnB for some studios and they look very busy.
@Mugundaman for some so pro property I don't understand why you can't see the current ability and future potential of Kirinyaga road. I can easily see this place becoming a Nairobi "canary wharf"
Kate_Mbarire
#78 Posted : Monday, November 05, 2018 8:21:31 PM
Rank: New-farer


Joined: 9/4/2018
Posts: 51
Location: Nairobi
wukan wrote:
Kate_Mbarire wrote:
wukan wrote:
MugundaMan wrote:


Na Kirinyaga Rd je? Laughing out loudly Laughing out loudly

Westlands an acre is going for easily 300 metre and above. The "average non-corrupt Joe" under 45 cannot obviously afford that, so it is a waste of time to preach the glories of Westlands on Wazoo.


I was on Kirinyaga road just the other day behind that road the area where the grogan mechanics operate there is some huge building coming up there must be like over 10 floors. I was shocked to see that kind of investment in that area. Some investors are clearly seeing the potential of that area. Further up the road the chinese are doing some serious road construction for their ngara project.


Where where Wukan?is this office space or lodging?
The high-rise on kirinyaga road?
Interesting...


It's a shithole street full of garbage, auto spares shops and mechanics I think it's called lower kirinyaga road. I had taken my jalopy for repairs and got to walk the streets. I was just surprised to see a high rise coming up there.
Wukan if these are bedsitters I want!you can't go wrong here...kirinyaga road is for the masses.You can get short term visitors to rent out who may not afford a stay in the big hotels but need somewhere close to places they can go for meetings etc.Will take a walk there one afternoon this week
whiteowl
#79 Posted : Monday, November 05, 2018 11:01:28 PM
Rank: Veteran


Joined: 4/16/2014
Posts: 1,294
Location: Bohemian Grove
tony stark wrote:
MugundaMan wrote:
wukan wrote:
MugundaMan wrote:


Na Kirinyaga Rd je? Laughing out loudly Laughing out loudly

Westlands an acre is going for easily 300 metre and above. The "average non-corrupt Joe" under 45 cannot obviously afford that, so it is a waste of time to preach the glories of Westlands on Wazoo.


I was on Kirinyaga road just the other day behind that road the area where the grogan mechanics operate there is some huge building coming up there must be like over 10 floors. I was shocked to see that kind of investment in that area. Some investors are clearly seeing the potential of that area. Further up the road the chinese are doing some serious road construction for their ngara project.


The problem with investing in a down at the heels area is that particular strategy is built on the developer's HOPE alone, which IMHO is not a good basis upon which to invest. Some areas just have a bad "taste" in the mouths of the average Kenyan. If you say for example you are going to put a luxury highrise in the middle of Dandora dumpsite, someone may think you have been smoking some bad bangi mbichi.

Laughing out loudly Laughing out loudly Laughing out loudly Laughing out loudly Laughing out loudly
Wewe wachana na bhangi. Use delusions of granduer as the excuse.
Kirinyaga road is prime for redicovery. It is next to a dirty river that can be cleaned up. That part of nairobi river even has a part ... I think it called michuki park.
Once the mechanics are kicked out... eventuality this place will blow up.
Right now the are has several AirBnB for some studios and they look very busy.
@Mugundaman for some so pro property I don't understand why you can't see the current ability and future potential of Kirinyaga road. I can easily see this place becoming a Nairobi "canary wharf"


Very ironic @Mugandaman can see potential in dustbowl but not in Kirinyaga road which is in the CBD.
MugundaMan
#80 Posted : Monday, November 05, 2018 11:15:02 PM
Rank: Veteran


Joined: 1/8/2018
Posts: 926
Location: Future Dustbowl Citizen
tony stark wrote:
MugundaMan wrote:
wukan wrote:
MugundaMan wrote:


Na Kirinyaga Rd je? Laughing out loudly Laughing out loudly

Westlands an acre is going for easily 300 metre and above. The "average non-corrupt Joe" under 45 cannot obviously afford that, so it is a waste of time to preach the glories of Westlands on Wazoo.


I was on Kirinyaga road just the other day behind that road the area where the grogan mechanics operate there is some huge building coming up there must be like over 10 floors. I was shocked to see that kind of investment in that area. Some investors are clearly seeing the potential of that area. Further up the road the chinese are doing some serious road construction for their ngara project.


The problem with investing in a down at the heels area is that particular strategy is built on the developer's HOPE alone, which IMHO is not a good basis upon which to invest. Some areas just have a bad "taste" in the mouths of the average Kenyan. If you say for example you are going to put a luxury highrise in the middle of Dandora dumpsite, someone may think you have been smoking some bad bangi mbichi.

Laughing out loudly Laughing out loudly Laughing out loudly Laughing out loudly Laughing out loudly
Wewe wachana na bhangi. Use delusions of granduer as the excuse.
Kirinyaga road is prime for redicovery. It is next to a dirty river that can be cleaned up. That part of nairobi river even has a part ... I think it called michuki park.
Once the mechanics are kicked out... eventuality this place will blow up.
Right now the are has several AirBnB for some studios and they look very busy.
@Mugundaman for some so pro property I don't understand why you can't see the current ability and future potential of Kirinyaga road. I can easily see this place becoming a Nairobi "canary wharf"



Don't get me wrong, I am not knocking Kirinyaga road. I am just knocking the idea of Wukan's idea of luxury bedsitters on Kirinyaga road as it is Laughing out loudly Laughing out loudly Laughing out loudly
The guy said he does not do Githurai 44 type typical Kenyan bedsitters but will do the high end New York style massive studio apartments (his idea of a bedsitter). Imagine forking 150k a month for a ka-one room with view like below. Haiwesekani jameni. Now those are the real delusions of grandeur from bangi mbichi! Laughing out loudly Fix the basic garbage collection, river pollution sewerage and clutter. I hope you are also joking that Kirinyaga rd can become Canary Wharf Laughing out loudly Laughing out loudly . Maybe only if the entire street is torn down to crumbs.

https://www.nation.co.ke...5564-34tfysz/index.html

"The best investment on earth is earth"
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