Build or buy? Why housing investors have to get it right
By Nashon Okowa
| July 18th 2020
Self-delusion in the face of unpleasant facts is, indeed, folly. Yet in the raging debate on whether to build, buy or rent a house, we have shied away from facing the dark reservoirs of unpleasant facts that have subconsciously adulterated our judgement.
First, the inherent peddled idea that buying a house is immaculately and objectively superior to renting is profoundly incorrect. On the contrary, statistics and evidence point that the two may be economically equivalent in the long run. I’m hesitant to be persuaded that more home ownership is an indicator of a country’s economic and development growth, or that home owners are better citizens. Apologists of this theory who look to sway governments to enter the foray of providing houses constantly refer to Singapore.
True, 91 per cent of Singapore’s population owns homes and the country is ranked ninth in the world’s human development index. But Romania’s population of home owners is at 98 per cent, yet the country is ranked 52nd in the world’s development index. Even more interesting is Switzerland; ranked second in the world development index with only 38 per cent of the population owning houses. So what is this fetish with house ownership? And should the government even be involved in this venture? We shall revisit.
The recent unfortunate happenings in the real estate sector are inadvertently driving many people to consider building a house over buying one, especially off-plan.
From the onset, let me say this; we have encouraged, in this country, a culture of soft, weak and delicate people who can’t defend their rights, who bail on commitments and quit on their aspirations the moment the smallest obstacles show up. I understand that necessity rules the world and that people rarely act unless compelled to, and sure enough, the many fraudulent cases in the real estate industry compel action. But courage should be the invariable mask to assume under these circumstances if ever we are to alter the course of this sector and our country.
I hold the view that the off-plan method is still the easiest route to home ownership, especially for first-time home buyers. In fact, no country in the world has done away with it. Granted, it has its challenges just like any other house purchasing model that requires our ingenuity and for government to seal the loopholes. Building a house will present you with even higher obstacles – it will push you. Buckle up.
Unlike when buying a house, you should be prepared to get involved in day-to-day construction affairs, from design to statutory approvals. And knowing our addiction to shortcuts as a people, you will be ripped apart by quack consultants and contractors. This metropolis is littered with weeping families with cracking houses built at astonishing cost.
Also you will be restricted by location due to high land prices in attractive areas unlike when buying a house, and there is no luxury to paying in instalments. I know people who have sub-consciously celebrated building a house over two years that should have taken six months. I am sure you have heard the phrase, 'nitajenga pole pole'. It is to their loss ultimately.
On the flip side, building a house presents you with the opportunity to tailor your design according to your desires. Further, with the right professionals involved, it may by large be cheaper than buying a house. Do not misunderstand me; I have no grudge against building a house. As a professional in this industry, I am actually more inclined to building than buying. But I am wary of the voyage we are taking under the illusion that building a house is inherently a better alternative to buying.
- The writer is chair of Association of Construction Managers of Kenya. [email protected]
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