The Uncertain Future of Real Estate in Nairobi

It is likely to assume that during an election period, investors delay investing in new properties and the spending rate decreases.We see a lot of property with the ‘for sale/rent’ signs. Apartments, houses, villas and bare land around Nairobi. Nairobi, has some of the most expensive property, land and housing. On Mombasa Road, an acre goes for about 480 million, and for the same amount, you can get a quarter in Upper Hill. In Muthaiga where ambassadors, top politicians and CEO’s reside, an acre goes up to 300 million shillings. Going by the house pricing index released by the Kenya Bankers Association in 2016, there is a reason to turn a blind eye, not really by being ignorant, and have a bit of doubt. In the past three years or so, there has been an increased supply, surpassing demand, and is now working against the developers, since it’s an inflated supply, which leads to losses. Price drop and stagnation are being witnessed in some parts of Nairobi and the market is being termed as not lucrative, at least at the moment. Two things involved : People are not spending but they are preparing to spend after the elections Prices will…

Real Estate Slowdown Leaves Banks With Rising Pile of Bad Loans

Gross non-performing loans (NPLs) rose 15.8 per cent to Sh170.6 billion in March compared to Sh147.3 billion in December, the Central Bank of Kenya (CBK) says in its first quarter industry report. “Real estate sector recorded the highest increase in NPLs over the quarter by Sh5.9 billion or 42.3 per cent. This is attributable to slow uptake of housing units,” the CBK report says, adding that the pile of bad loans in the personal/household sector increased by Sh5.7 billion or 21.5 per cent between December 2015 and March 2016 “as a result of negative macroeconomic drivers such as job losses and delayed salaries.” Story by Victor Juma. Read more Source