Land prices push developers from the city

By Peter Muiruri

Scarcity of land within Nairobi city has seen a spike in property prices; pushing developers into satellite towns such as Ngong, Kiserian, Athi River and Kikuyu. This has compounded matters for Nairobi’s middle-income earners whose hopes of owning a home within the city evaporate by the day.

Developers estimate that land prices within Nairobi are known to double within the year while the normal rate of increase should be between 15 and 20 per cent.

Paradoxically, some posh estates within the city continue to sit on prime land with little developments and fewer inhabitants. Efforts to free some of this land through a rezoning process by the city authorities have always been met with opposition, more so from the powerful resident associations.

The situation is further aggravated by dubious land transactions over the years. Many prospective homeowners believe that one is more likely to be conned while buying property within the city than elsewhere.

Daniel Rono of Maestro Properties says as more and more Kenyans desire to own some piece of land in the city; cases of fraud can only increase.

“Since everybody wants to own a piece of Nairobi, people will always go for what seems to be cheaper not knowing that the deal might be too good to be true. However, many developers are now wiser and are looking outside the confines of the city for affordable property,” says Rono.

Regardless of such pitfalls, land transaction experts say demand for land within the city is not going to slow down any time soon.

“Any business within the city attracts high human traffic as witnessed in the many exhibition stalls within the city. Living close to such businesses is the wish of any person, whether a customer or a vendor. This affects the purchase price of property or rentals that may not be sustainable in the long run,” says Charles Peter Mwangi, a property valuer with Rubyland Limited.

Bureacracy

Mwangi says such trends may not be easily reversed unless there is a complete policy shift such as moving the capital to a different geographical location altogether.

Nairobi city, he adds, is not only Kenya’s business hub but also a regional and continental centre owing to the many multinational bodies, many of which sit on prime land. The situation is not expected to change regardless of the country’s move to a devolved system of government after the forthcoming general elections.

“We have the United Nations and many other diplomatic missions in Nairobi. These have given the country international recognition. These need to be in these prime locations for obvious security reasons,” says Mwangi.

Another major hindrance to obtaining property within the city is the official bureaucracy in the Lands office. Experts argue that such long official procedures give birth to corrupt deals making many developers look for land outside the city where transactions are kept to a bare minimum.

In view of the dire situation, developers continue to flock to the peri-urban areas where they take with them city lifestyles.

Ian Henderson, the managing director of Superior Homes Limited and developer of Athi River’s Green Park Estate, land outside the city is within reach of many developers hence their heavy presence in these areas.

“Land in the city is becoming limited while the prices are exorbitant for the few parcels that remain. We want to give people a homely lifestyle where one can have a small compound rather than squeeze them in tight-knit urban houses,” says Henderson.

Henderson says many people living in these areas are still able to access their workplaces within the city due to improved infrastructure. The government has already commissioned a rail service from Syokimau to the city centre, which targets many residents of Athi River, Mlolongo and surrounding areas.

Peter Muraya of Suraya Property Group feels the government can do its bit in releasing some idle land within the city that developers can then use in providing affordable houses.

“Some government parastatals are sitting on idle land that is currently surrounded by private developments in high density areas. It is illogical to continue hoarding the same and should be released to private developers,” Muraya says.

Master plan restruction

However, in an interview with Home and Away, Nairobi Town Clerk   Tom Odongo says the shortage of land within the city is only artificial.

Odongo argues that many people hold land for speculative purposes hence the high prices that lock out many developers adding that current property price per unit in the city is not compatible with similar economies elsewhere.

The current master plan for the city aggravates the problem due to the density restrictions in certain areas.

“The master plan restricts us from availing land for housing. A comprehensive review of the same will be completed in April 2014. Only then shall we properly assess the availability of land within the city,” says Odongo.

Odongo says people in the city must be willing to accept change if they are to enjoy better living standards since “Vision 2030 will not be realised by adding more and more people in slums”.

Nairobi produces 60 per cent of the country’s GDP hence the need to put in place measures that will attract more investors in real estate to continue this upward growth.

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