Cheap Desperate Property Floating In Kenyan Market For Those With Floating $$$

Business
1

Between January 11-13, the local newspapers have been filled with hundreds of homes and commercial properties set for auction valued in the hundreds of millions.

From maisonettes located within gated communities in Syokimau, to bungalows in Westlands, to whole apartment blocks in Kahawa Wendani, the auctioneer’s hammer spared no one.

Among the properties that stand out and have been put up for auction include a 3-star hotel in South B, Nairobi County with a projected annual income of Ksh3 million.

A hotel along Limuru Road in Ngara, Nairobi, was also listed on January 11, with a Ksh1.2 million highlighted as its monthly rental yield.

https://www.kenyans.co.ke/files/styles/article_inner_mobile/public/images/media/An%20auction%20directional%20signage..jpg?itok=HNO_wHDZ[ATTACH=full]344557[/ATTACH]
Directional signage for an auction.

Luxury vehicles were not spared either, as hundreds were listed, with auctioneers jostling to make a killing.

Thousands of vehicles ranging from personal cars to heavy-duty commercial trucks have been repossessed and put up for auction.

In February 2020, NextGen Mall (located along Mombasa) made headlines after a local auctioneer listed a section of its 1st floor in order to recover a loan of an undisclosed amount. The Mirage Executive Office Complex building in Westlands was also listed.

However, if auctions carried out in 2020 are to be used to measure success, just about 10% of the properties on auction are finding buyers.

There are instances where the auctioneers have not found anyone willing to bid above the reserve price.

This has seen phrases like ‘buyer’s market’ thrown around, as predator buyers are in a position to secure assets at almost half their value.

A recent analysis revealed that of the hundreds of properties on auction, on the back of a slowing economy, only a handful have found buyers. The most affected are high-end properties.

Auctioneers are finding it hard to dispose of houses (both residential and commercial) and other assets, whose value could be running into billions of shillings.

2

Lenders are now seeking wats to restructure debts rather than putting assets under auctioneers hammer. Prime example Jeff joinange and his houses in Kitisuru.

3

Saa hii mtu ana $$$ locally anaweza okota very decent properties from cash strapped and desperate sellers. The economy is in shambles and it is an opportunist’s paradise.

4

Shida is property was so overpriced so hata ukinunua you’re not taking advantage of the dip completely.

5

Yeah nimeshika gazeti baze and several pages full of property up for grabs. Dire straits yo. Maybe the smart money sio kubuy plot na kujenga ila to wait for some of these and renovate accordingly to taste? No mega hassles, permits, contractor issues

6

Property too pricey, reserve price too high as well. As for commercial property such hotels? Unless you have something else lined up for it? Na huu uchumi vile iko utaungua pia.

7

I have been looking for property. It is seriously overpriced. I dont think the auction route is the way to go. They have to meet reserve prices. Some of those properties will never sell at asking price if you purchase because of the road network opening up and making places further interior cheaper.
Land is what is expensive. The structure adds a premium. So people have resorted to buying land in 8ths, undertaking construction and the total cost end up less than whats on auction.
Huge listings of property in 8ths. Those have no discounts.

8

If you buy those houses being auctioned you will not get value for money. building ina monthly income ya 3m inauzwa over 500m, hakuna mtu atatupa pesa yake hapo

9

Get in touch. I got good bargains on property

10

Consumers pockets have also been hit…theres no point…coz chances you generating regular cash flows leave alone profiteering and recouping is highly doubtful in this here covid era.
Sahi hata na cheda…id take the wait and see approach…and even if things get better chances are i wouldnt partake.
My take is prices are still high coz they targetting corruption money kina covid billionaires tenderpreneurs sio smart savy investors who wont obviously invest.

11

True true… Hapa ni watu wa illicit cash who would take up the properties. Also, na hizo reserve price zao no wonder nobody is willing. No value for money

12

Hata hawana aibu… Payback period ya 150 years? No wonder no one bothers buying these things.

13

Hii hesabu imekuchenga by over 135years

14

Estates located in Nairobi’s leafy suburbs registered major drop in rental prices in 2020.

According to the Hassconsult Property Index Report 2020, published on January 3, 2021, 12 of the 15 listed neighborhoods recorded a negative annual change in rent.

Kitisuru led the way in terms of high-end estates where rental prices dropped, with an overall annual change of -6.5%.

The rest were listed as follows: Loresho (-6.4%), Lavington (-5.8%), Spring Valley (-4.9%), Ridgeways (-4.6%), Kileleshwa (-2.6%), with Nyari and Runda both recording -2.2% annual change in rental prices.

https://www.kenyans.co.ke/files/styles/article_inner_mobile/public/images/media/A%20block%20of%20apartments%20in%20Nairobi%2C%20Kenya..jpg?itok=6MsNpJfC
A block of apartments in Nairobi, Kenya.

“A few suburbs have backed the trend of falling rents which still continue as tenants are negotiating for discounts amid the tough economic environment,” reads an excerpt from the report.

“Most buyers of high-end houses are looking for properties that offer consistent or stable returns regardless of the state of the overall property market. Additionally, buyers who want that dream home in some of the exclusive neighborhoods are prepared to pay a premium,” it further reads.

[ATTACH=full]348076[/ATTACH]
Posh houses located in the outskirts of Nairobi County

Muthaiga houses recorded the biggest quarterly increase in prices at 1.4% .

On the other hand, the recent trend of Nairobi residents moving to satellite towns was captured in the latest report in which apartments in Thika posted the highest quarterly increase at 1.8%.

The satellite town with the highest annual Increase in Rental Price was Ngong, which saw a 9% increase in rental price over the last year.

The spike in prices in Thika and Ngong is notable as it proves a spike in demand for houses outside the city.

Apartments in Lang’ata recorded the highest asking rents over the quarter at 3.5%.

[ATTACH=full]348075[/ATTACH]
The 5 bedroom mansion in Muthaiga.

Covid-19 related disruptions in real estate have resulted in significant changes in the industry as Kenyans seek cheaper housing alternatives.

Property prices are subsequently expected to begin 2021 on a weaker footing.