IF YOU INTEND TO OWN A HOUSE IN KENYA, PLEASE READ THIS:
A few of us are not surprised by the current state of affairs in the real estate sector. After being in the industry for close to a decade, we saw it coming and even warned about it. Read https://allafrica.com/stories/200712061135.html then also read https://www.businessdailyafrica.com/-/539444/572736/-/view/printVersion/-/6t4fr3/-/index.html also read https://www.standardmedia.co.ke/article/2000013363/property-prices-in-correction-mode-after-lengthy-speculation also read https://www.dhirubhai.net/pulse/alert-bubble-bursting-morris-aron/ What we are surprised about is the lackluster approach with which landlords/property owners and those with loans to fix are approaching the issue if the level of auctions is anything to go by. (read: https://www.standardmedia.co.ke/article/2001358045/kenya-is-now-an-auction-market) The following things lead the market to where it is now: ambitious/gluttonous pricing that priced the properties market out of the market (ironical huh? Remember you never go wrong with property and all those adverts about property prices always rising? Well, it is not always the case and now you know. Sometimes they dip), demand-supply mismatch with a bias to the high end when most demand is in the mid to low end, a facade of a mortgage system--Kenya's mortgage system is designed to block you from home ownership. That is why even bankers who dish them out cannot afford them, get it? and economy economy that is tanking sank it all. When the rate cap came into place and banks stopped lending, they buried us all. We are now full throttle with the effects of the same even with talks of revolution all over the place...Seen how almost everyone is so angry nowadays? We are yet to hit the rock bottom. That will happen by around June on wards. More and more properties will be placed on auction, as more get distressed. What to do--it is important that the owners accept that things are bad and that the pricing has changed. Property prices across the board need to be reviewed downwards by at least 25%-30% to stimulate sales. Some are already doing this. Some of the apartments and standalones are clearly still overpriced. Secondly, banks need to loan money.. (with the rate cap gone there is even a need to have a law for the financial institutions to loan 20% of their loan book to MSMEs and households within a specified time frame to get the economy running again). This of course will bring inflationary pressures but what is better, an economy on standstill or inflationary pressures? It is simple, banks just have to loan money to MSMEs and Households en masse and at an affordable rate. Finally, auction must not be the only way out..let sit and talk and innovate. CONTACT US ON 0798195802/0720595077 for great property discounts. cc Property & Discounts