For some time now I have been reading articles on this topic with a condescending sneer. You see, my vibanda, which are located near one of our public universities, have enjoyed 95-100% occupancy since completion. It has been smooth since day one… not anymore, the housing bubble has caught up with me, finally. It actually started in a most innocuous of ways. One unit became empty about three months ago. No panic, someone will come along. This month another two became vacant when two more students completed their studies and packed. On asking the caretaker what was going on he told me three more rooms will be vacated at the end of the month! He further said Matiang’i abolished the parallel programme in our universities which had ensured continuous occupancy of nearby rental properties throughout the year. As a result occupancy is steadily plummeting as students complete their degree programmes. To make matters worse, more developers are putting up new rentals day and night. I walked around the area and soon realised the problem was much bigger than I had thought. There were empty rooms in almost all the surrounding apartments. One apartment with 64 units had only 10 tenants!
Campuses were being inaugurated all over the place so not shocked by the redundancy in courses offered
Investors who were still servicing loans have to look elsewhere for funds
Its that bad, things are getting thicker
There is a big housing shortage in Nairobi.
If you find any vacant houses, it means the developer didn’t understand which class has the shortage.
True Kennedy, but you will find clusters of oversupply like the one I described above.
Very true.
Usilie hivo sana. Umekulia hizo keja kiasi.
If the property is not geared, you will survive. In Kenya, it never makes business sense to own rental property using loans so if you have a big loan on it, there is a decent chance you will lose the property to the bank. Kama hauna loan you can survive a recession.
Landlords and agents no longer have that ‘’ chukua ama uwache" attitude. Entitlement and the notion that “if I build, they will come” has been shattered . Reality check imeingia as whole floors go unoccupied for months.
Nyumba ya Nyahururu - yenye OCS ndio your rental collection agent - iko na loan?
Hakuna waas. I think it’s just a market correction. Soon it will be back to normal.
No such worry, zero liability on the property.
In that case uko sawa. Utasurvive tu usijali bora huharakishwi na loans.
Exactly. Houses below 15k are never vacant because they capture the bulk of Nairobians. Everyone including bank tellers, students etc. But developers naona wanajaza apartments za 30k+ places kama Ruaka etc but that market segment is not large enough.
How about remodelling the interior, by combining several rooms to create family housing.
Mimi on Wednesday Daily Nation classified I saw five full pages za auctioneers. I knew it’s going to be worse. Wanaume wanalilia kwa choo.
You think all campuses are located in town?
Watu wengi sana hufinance mjengo (rentals) na loan ya 13%. Hizo nyumba hukuwa auctioned economy ikiharibika before wamalize kulipa, especially kama loan ni a big part of the equity. Kama US financial crisis.
Diamond Plaza…leo nimeona the Stark reality. Entire floors unoccupied including many stores available at prime locations i.e. first floor.
Lakini huyu mhindi atawakamua tu once he gets tenants in with annual rent increases.