What lessons does the demolition of houses in Syokimau teach city residents who have in recent months been caught by a land-buying fever that has spurred property prices in Nairobi and its environs?
Is the astronomical cost of land something that should be celebrated as a mark of a vibrant property market or should it be cause for pause as a symptom of an unhealthy appetite for plots?
Further, why do property dealers — many of who operate from cargo containers and dingy offices in dank, backstreet buildings — raise their prices every month when they have added no value to the land which is, for all intents and purposes, bush and scrub? And is it right for buyers — who have to forage through blackjack weeds to unearth buried beacons — to fork out millions of shillings before they can get genuine land transfer documents including title deeds and land rate receipts
These are some of the questions that I invite land buyers and potential home builders to consider in the face of the rising demand for land in Nairobi and its surrounding regions.
No doubt, many of those taking loans to buy land are well-meaning investors who either intend to build their own family homes or flats for sale or rent.
Their intentions are noble but by abetting shady transactions with suspect brokers, dubious dealers, rogue directors and corrupt public officials, they are unwittingly contributing to the overheating of property prices to their own detriment.
In effect, they are ascribing more value to land than is actually due on an as-is-where-is basis. In a sense, they end up paying more not for the actual value of the land but for a promise of a future prosperity that is based more on sentiment than by social fundamentals. An example will suffice.
There are, if you ask me, very few places in Africa — or elsewhere for that matter — where a 100m x 100m piece of undeveloped piece of land costs upward of Sh10 million. Yet, this is the asking price for sod in places like Rwaka, Kiambu, which was until the building of the northern bypass earlier this year a backwater shopping centre. Despite the steep asking price, one would be hard-pressed to find a decent school, sports facility, public park, eatery or entertainment spot in this area that would justify the price.
The Village Market, about five kilometres away, is meant to cater for Runda, Unep, Red Hill and Muthaiga areas, all of which are high-end estates, some of which have their own flags, residents associations and newsletters. In fact, none of these social amenities exist in the Rwaka area and as far as the eye can see, there no provisions for them.
So, why are land buyers and home-builders trooping to there in droves? Is there a hidden value that they have spotted besides proximity to the new road
Ideally, the new roads coming up in hitherto “dark” areas surrounding the greater Nairobi metropolis ought to be an added advantage to lure potential buyers. But these days, brokers quote roads, proximity to electricity and water supply as part of the price of the land, yet these are public services that every buyer should take for granted.
The roads are, after all, built using tax money, so why should a taxpayer be charged extra for the same service by a private entity that does not provide infrastructure services
When one pays the four per cent stamp duty for land transfers one automatically assumes that the money will be put in a basket that will pay for all public services, including security. Therefore, these services should not be selling points for land. They are just added advantages.
It is not right to watch bulldozers tearing down the dream homes that hard-working Kenyans have built with their sweat and blood. But there is also everything the matter when we have collectively created a system that milks us all dry before saddling us with land that is either disputed or that belongs to someone else even when that someone else is the government.
The question we should be asking is this: How can we make this system better so that it is beneficial to all? In my view, unless we can find an answer to this question, buyers, builders, landlords and tenants in the greater Nairobi will continue to pay unjustifiably high prices for land and houses.
By Ng’ang’a Mbugua
Mr Mbugua is the Chief Sub-Editor of the Business Daily
Source- http://www.businessdailyafrica.com/Opinion+++Analysis/Do+we+have+an+unhealthy+appetite+for+plots/-/539548/1276604/-/ekxbxv/-/index.html
