Summary : Prices in Kilimani drop 5%, drop also seen in Donholm, Eastleigh and Ridgeways since last June due to oversupply.
Average home prices in Karen, popular with politicians and business leaders, have risen nearly 17 per cent since last June.
Land prices have fallen by a 10th in the three months to June, while home prices fell 1.2 per cent over this period. Implications of the supply-demand showdown have already been captured by the Central Bank of Kenya (CBK), which reported bad loans in the real estate sector had jumped by nearly half in the three months ending March.
Fully story;
Investors in several neighbourhoods in Nairobi are reeling from a slump in home prices and rent as excess supply bites. Selling prices in Kilimani have dropped more than 5 per cent since last June to lead in the slump that has also been witnessed in Donholm, Eastleigh and Ridgeways, according to findings presented by real estate consultancy HassConsult. A dip in prices is a reflection of slowing demand, further compounding concerns that developers who borrowed to fund for-sale projects could be coming under distress. Rental prices in the high-end Westlands district are down 3.4 per cent, while Karen is reported as the best-performing estate for landlords. “We have seen oversupply in these areas,” head of the research Sakina Hassanali said yesterday, referring to the middle-income neighbourhoods that have been worst hit. The supply of three-bedroom apartments has stayed ahead of demand, translating to low occupancy levels. Real estate firm rolls out solution to boost home ownership Rent for Nairobi’s upmarket falls, says property firm Investors snap up space at Fusion mall Bad loans Mlolongo, a satellite town along Mombasa Road, has also taken a beating from heavy traffic on the highway to reverse the price hikes of the past. Land prices have fallen by a 10th in the three months to June, while home prices fell 1.2 per cent over this period. Implications of the supply-demand showdown have already been captured by the Central Bank of Kenya (CBK), which reported bad loans in the real estate sector had jumped by nearly half in the three months ending March. “This is attributable to the slow uptake of housing units,” CBK said in its latest quarterly report. One of the reasons for the slowing uptake is that home sellers may have priced themselves out of the market. The average closing price for a residence in Nairobi has jumped seven-fold in 10 years, while rent has risen just three-and-half times, according to survey. A tool used to check home prices against the rent they can generate puts Nairobi significantly ahead of most cities in the world. Investors in property in South Africa can receive rent equal to the value of their homes in 9.79 years, compared to 15 years in the Kenyan capital, according to international research firm, Numbeo. The pricing disconnect could be evidence that home prices are overly inflated, a situation made worse by the swelling land prices. Land prices have soared more than six times in 10 years in Kilimani, where an acre has a going rate of Sh430 million. Average home prices in Karen, popular with politicians and business leaders, have risen nearly 17 per cent since last June, to stay ahead of land prices that rose by a 10th. Infrastructure developments, specifically improvements on the road network around the city, have also helped in opening up satellite towns and raising the values of land and homes, which could diffuse the rapid price increments in Nairobi.
Tulisema hii maneno hapa hapa wengine Wakasema ni pang’ang’a. In nax it’s already being felt in some areas. Guys took loans to build apartments for rent and they can’t rent them out at the rates projected to sustain the loan and their income. Kuna complete project I was being pushed to buy at Naka (an upper middle-class estate) kwa be nafuu sana because the owner had the bank on his asss
This is the best advice I have ever received regarding real estate.
"…My view is this. There is a lot of noise about how you can’t go wrong with real estate. Is noise could be coming from all the people along the value chain before the final house buyer takes up the house.
The architect, the land seller, the consultants, the lawyers etc… All will say that real estate is good. It’s true from their point of view since they keep reaping huge profits from real estate even though the final buyers are holding the wrong end of the stick.
These guys along the chain have very little risk. They supply and they get paid. The buyer has the risk of holding the asset and yielding below average return…"
In your case,the person who took the loan to make apartments is holding the short end of the stick. He wanted to transfer it to you and shift his losses to you.
tunataka 2 bedrroms zifike at most 15k, cant b paying 18k in average neighbourhoods with no paved roads. On another note,Ata developers wameacha kujenga 1br.
All these is bullshit. Houses and land have no fixed price an thus cannot be measured so accurately for anyone to claim these silly percentages. One person will sell half an acre in Karen at 20m yet another will make a cool 30m depending on time and how desperate the buyer is. As for houses, well done houses with ample parking and large gardens whether flat or stand alone will fetch fair rent if not overpriced. Anyone saying they cant rent their property has simply overpriuced it or does not want to advertise.
I agree. Wale wataumia sana are the ones selling apartments because they are too many but the target market haiongezeki…:D:D Napenda sana, mpango ni ile ile by Dec naingia keja ya 12k swafi kuruka
Where i stay huyo landlord ako na apartment ya two wings a and b na kila wing iko na 20 one bedroom units iko na five floors na two penthouses the finishing is awesome na maji ni free though ni ya borehole plenty of parking na security its four months since amalize na so far hata hazifikisha occupancy ya a quarter of the total units ile siku nilihamia alinientice na free stay ya 10days