Real Estate Is Overrated: Data Shows

Real estate won’t make you wealthy. It is just a nice place to pack your money and protect it from inflation.

Summary:

Land prices in Nairobi and satellite towns only doubled between 2013 and 2023. Higher end areas had an even lower ROI. On average mtu alibuy shamba anywhere near Nairobi in 2013 can only sell it at 2X the price today.

Houses and apartments performed even worse than bare land. People who bought apartments in Kilimani in 2013 are underwater today. The ROI is 0.83X. Other high end areas also saw stagnation in apartment prices e.g Kileleshwa 1.04X and Lavington 1.07X after 10 years!!

Its cheaper to rent an apartment in Lavington today than it was in 2014!! Its cheaper to buy a house today in Juja than it was in 2014. Its cheaper to buy an apartment in Rongai today compared to 2014.

Summary: The best you can hope for is to double your money in 10 years if you are lucky. That applies for land, houses, and apartments in that order with apartments being the worst performing “investments”.

Watu wa buroti maguta maguta sorry juu that was our parent’s strategy to get rich and it certainly won’t work for you. The era of buying plots in the middle of nowhere and minting millions is officially over. The only real money left is in value addition, not pure speculation.



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What are you talking about? Do your research first and bring your findings, kwa ground vitu ni different. Hapa kwetu a 100 by 100 zilikuwa zinatoka 450-800k. Sahi zinauzwa 4M kuendelea.

@Mzee_Mashavu can confirm land kamulu ni mangapi…he recently bought a plot there.

Enda joska na bei ya 40 by 80 ni 1 M.

@Tulivu_Properties pitia hapa and share some info in line with OP’s sentiment.

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What research do you want na nimeattach evidence?? Hizo 100 by 100 zilikuwa zinauzwa 450k which year juu my post is very clear data ni ya the last 10 years. So usilete hekaya za bei ya 2002.

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2002 nilikuwa mless saidi. Nasema kuhusu 2014.

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Leta evidence ya 2013/14 prices and 2024 prices wacha story mingi. Ujue mimi I’m quoting a reputable research and real estate firm in Kenya sio hekaya.

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Gaines…you are being combative for no reason.

Relax.

Nasema what I know and what’s happening kwa ground. You are relying on published materials. The intention of the author(s) is simple; to make a reader look at real estate negatively. Something that you want everyone to believe maybe because you are not into real estate.

Wacha kupenda ku discourage watu banae…

(Nangoja attack Moja wazimu…but haisuru)

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Unataka kubishana na watu walinunua shamba huko. Are you going MAD?

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Nimeitisha evidence ghasia.

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Mkubwa si ulisema uko na a 15M 2 bedroom apartment in Westlands, a 12M 2 bedroom in Kilimani na sijui maisonette Kitengela? Are you regretting those apartments ama? Si uko mnaishi na expats ama unataka kuuza izo apartments ukagundua why would someone buy your old ass unit for 18M yenye unataka when there’s a NEW off-plan development coming up at 10M?

At least you’ve learnt through experience. The good thing is that you now have apartments in one of the fastest growing cities in Africa. In 10 years when your kids are adults, GOK would have introduced urban planning restricting construction of new units just like in major American cities. You will be laughing all the way to the bank. Utakuwa unapata a two bedroom apartment costs $400k. Kuwa mpole.

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He is right. It may be cheaper to rent in some areas owing to the rise of better houses in those areas or an oversupply (which is rare). However, land itself, keeps appreciating, at least until someone invents a way to create new land. However slow the appreciation may seem to be in some areas, it’s not a bad tangible asset. Observe where people will want to live or have economic activities in 4-15 years and buy bare land there. Land, not already built apartments whose only return may be pegged on their ability to be rented out. Don’t trust data compiled by people swinging in office chairs in Westlands etc. Trust your eyes. Enda kwa ground mwenyewe.

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"Mkubwa si ulisema uko na a 15M 2 bedroom apartment in Westlands, a 12M 2 bedroom in Kilimani na sijui maisonette Kitengela? "…hebu leta evidence juu this is the highest form of verbal diarrhea I have read today.

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I think the real money today is in value addition. Enzi za kununua plot na kurudi kwa ofisi waiting for it to appreciate zimeisha. The returns are meagre when you factor inflation.

Wale watu wanaunda pesa ni those who buy large parcels of land, subdivide, instal sewer lines, electricity, water, roads, and maybe a fence+gate such that buyers will simply buy plots and build. Alternatively, the others making a kill are developers of apartments and houses in gated estates.

Do not expect to buy a plot and sell it at 10X what you paid for it after 10 years. That era ended in the early 2010s.

I know someone who bought a house in Spring Valley in 2007 for 14M. In 2010 he received an offer for 30M. Today the house is worth 50M if he is lucky. Meaning in the last 13 years the house has gained just 67%. In the 4 years before that the house’s price rose by over 100%. That’s around the same time Thika Road was being constructed and people made money like bandits and the property market was on fire in Nairobi and environs.

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@Tulivu_Properties Hii ndio trick Optiven na AMG Realtors wanatumia. Maybe try this strategy badala ya kuuzia watu empty lots Joska

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Buroti maguta idiots will never believe their own eyes

When you consider the inflation rate of around 10% per year. Any land that has not 2x its value has lost. 10% per annum inflation means in 10 years, any land going for the same price as 2014 has depreciated by 100%.

Kama ulinunua puloti 1 million in 2014, and you sell it 1 million in 2024, you have lost 100k every year, which means you have suffered a 1 million loss.

Not to mention finding a buyer is tough. It will take you six months to two years to get a buyer. Means you will suffer a 1.2 million loss on your 1 million investment.

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You’ve been a nay sayer on every topic, and that’s a good thing. Helps keep the argument balanced, you are able to see what could not be, when all we see is what could be. While I cannot say I got enough property to retire, I’ve acquired 2-3 parcels in the past 10 years and all I can say you’re ill advised on your debate. @Tulivu_Properties has been moderate in his answer, but if he were to be honest he would have destroyed you with facts.

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Nahurumia pipi. Your family will die poor

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:smile:The truth about places like Joska is that they will always be close to Nairobi, and another Joska is not being created, so prices will always rise until the day the very far fetched idea of urban- rural migration becomes a reality in Kenya.

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Tumwage mtama bas. For the seller, this allows them to sell overpriced property in the guise of value addition, but for the buyer, which most elders are, hii inakuwanga kugongwa. You all end up owning land in a place with trees and other ‘shared’ amenities that none of you has say over. Seedling moja wholesale ni 10-15 bob. Mfuko ya cabro ni 10k. Mkifanya mahesabu mmeuziwa place ya 800k for 1.5m juu ya hizo vitu hapo ndio unajikuna kichwa twice.

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Actually @Yuletapeli is right on prices of 100×100 being sold at 800k in 2014 though hajasema that hizo ni shamba zenye zilikuwa 3-5km from the road. Hakuna shamba ya barabara ilikuwa inauzwa 800k 2014. Also shamba za 450k hazikuwa zinauzwa 2014 hizo ni bei za 2007 - 2010 hapo. Huko karibu na Drumvale primary niliona Fanaka wakiuza 50×100 at 1.4M.

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