ill add my 2 cents(im an aspiring economist)<div><br></div><div>there are several forces in play in the Kenyan economic space.</div><div>Foreign money in form of</div><div><ol><li>Diaspora investment into property although that reduced after economic crisis-lost jobs,unavailable credit in west</li>
<li>Expartriates - working for africa headquarters and UN type of organisations- most rent houses for 150 to 300k some more</li><li>Pirate money</li><li>Drug money </li><li>Other money laundering initiatives</li></ol><div>
Local money </div></div><div><ol><li>Corruption money- politicians and &quot;smart&quot; dealers who launder money from big corrupt deals(parastatals and govt deals) into housing estates (does tokyo ring a bell? wonder where the money went?) </li>
<li>Hard earned cash</li><li>Mortgages for wananchi who use hard earned salaries to pay double the price of property every month </li></ol><div>If you are buying a house on mortgage basis and repaying monthly rates of 70k and fetching rent of 30k guess what the real value of the property is???? 30k it will appreciate but thats its real value now.</div>
</div><div><br></div><div>The market bust will only happen when </div><div><ol><li>Corruption is stemmed(a lot is happening in that direction albeit slowly)</li><li>China or US kasirika and attack somalia and stop this pirate trade that is suspiciously a protected industry....</li>
<li>Middle class move back to counties to build their localities or new developments shift focus from current upmarket developments</li></ol><div>However, prices wont come down much unless we have an economic downturn, which in Kenya could be like 30 years away seeing what is happening now in terms of economic expansion.</div>
</div><div><br></div><div>Its a gamble to buy property nowadays (you could buy a house for 12 milli and the property developer was just a quack and the house starts leaking, ive heard a few horror stories) but if you have ready cash or at least 50% property down payment then its a wise investment since your mortgage repayments wont be outright theft...</div>
<div><br><div class="gmail_quote">On Tue, Nov 30, 2010 at 9:15 AM, aki <span dir="ltr">&lt;<a href="mailto:aki275@gmail.com">aki275@gmail.com</a>&gt;</span> wrote:<br><blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex;">
<div>@Peter, based on your expert opinion, we still do not have any answers to the steep price rises and the high demand buyouts on such inflated prices. Bottomline is the sector needs serious investigations and implementations of anti-abuse measures. KRA for example needs to implement a system that requires buyers to declare source of funds before the land registry can act on the sale, something like a clearance certificate which also covers banks/developers who may be hiding the &quot;cash economy&quot;.  The problem is there is no one to police the KRA, therefore land transactions also remain behind the curtains. The price of this expensive boom is going to have a very bad effect on the economy down the road where property will remain out of reach for many kenyans. So rather than stimulate investments, the current trends discourage such investments. While I&#39;d not discourage anyone to buy property here, I&#39;d advice them to shop around first. Kenyan property is definately not worth the prices that are being pushed by developers/banks but we know that KE is not a cheap place either. </div>


<div> </div>
<div>The govt puts inflation at around 2.5% yet the annual increase in rents is not less than 10%. Surely, the govt is disconnected from the realities on the ground and letting things go on unchecked. I still put the blame on CBK for being a cheer leader in the downward slide. Business may be good for some but that does not mean the economy is doing well. The economy should be doing much better and giving more power to its citizens on investments and reduction on cost of living. </div>


<div> </div>
<div>Me techie thots.  </div>
<div> </div>
<div>Rgds.</div>
<div> </div>
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