Wahinya Henry @PeopleDailyKe
Uncertainty about title deeds in some parts of Nairobi is keeping developers from sinking their fortunes in real estate.
Fear of investing in land whose papers may turn out to be fake is a major reason for the drop in the sector’s performance in the metropolitan area in the second quarter of the year.
The same scenario has reduced liquidity in the market as reflected by advertised property auctions, says HassConsult’s Head of Development and Research, Sakina Hassanali.
She spoke at a media briefing at a Nairobi hotel while releasing House Price Index Quarter Two Report 2019. “Advertised land prices in the city remained static. Asking house prices slowed down by three per cent compared to the previous quarter,” she said.
Corruption money
A general economic slowdown, lack of adequate credit to developers as banks hesitate to lend due to the cap on interest rates and hoarding of ill-gotten money has also slowed down the market.
Optiven CEO George Wachiuri attributes the decline of prices in the Nairobi metropolitan areas to exorbitant prices that are unaffordable by many investors. “The flow of corruption money into the property market has also declined due to a government anti-corruption crackdown,” he says.
He says the Chinese effect is meanwhile stabilising. During former President Kibaki’s regime, the Chinese came in big numbers and were picking every plot available without minding the prices. “Now, the Chinese are getting to know the true value of land,” says Wachiuri.
Sakina said between April and June for instance, house and plot prices in Donholm declined due to fears over suspect fake title deeds. “Investors have adopted a cautious approach investing in Nairobi’s Donholm suburb which has seen prices in the area drop by two per cent ,” she said.
The hesitation was triggered by an announcement by the National Land Commission in March when it cast doubt over validity of titles in Donholm and some other parts of the city. Investors are cautious over authenticity of title deeds considering that real estate projects are capital-intensive projects.
On an annual basis, Donholm reported a 2.42 per cent drop, the highest annual drop since the index. Previous reports indicated Donholm as a stellar performer due to construction of the new dual carriageway, Outer Ring Road.
President duped
The title deed fears have eroded the expected gains similar to what was witnessed in Kiambu county when they reported a drop in prices following uncertainty over proposed new land laws.
The fake title deed controversy erupted after it emerged that President Uhuru Kenyatta was duped into presenting dummy title deeds at Jacaranda Grounds last year. This came out during a Nairobi County Assembly Planning Committee sitting in February.
Appearing before the committeechaired by Waithaka MCA Anthony Kiragu, City Hall Lands and Housing executive Charles Kerich could not explain who lied to the President into presiding over the handing over of the titles when only 50 out of 50,000 titles were ready.
Kerich said only 623 title deeds have been issued to residents of Eastlands since President Uhuru launched the exercise in 2017.In a move aimed at unlocking more than Sh20 billion through business and investment, Uhuru had promised that 100, 000 titles were to be released by the end of 2018.
In a swift rejoinder, the ministry of Lands rubbished the fake Embakasi title deed claims by the Nairobi county goverment. Lands Chief Administration Secretary Gideon Mung’aro told the Senate Lands and Environment committee the ministry cannot issue fake titles. “The claims are malicious and unfounded,” he said.
Meanwhile, it is not all gloom for real estate land seekers, with Spring Valley recording the highest land price increase at 4.43 per cent. Upper Hill remained the most expensive, with an acre costing Sh550 million despite a high stock of commercial and residential units present and those in the pipeline in the suburbs.
Annually, Nyari was the best performing suburb with house rents increasing by 13.2 per cent, but Kilimani apartments dropped by four per cent. Juja boasts asking prices 16 times higher than 2007 as the area continues to gain prominence as a university city and divindeds from the Thika Superhighway.
Savvy investors have been buying properties at discounted prices confident that once the economy picks up, prices will recover. “Property is a long- term investment and has historically performed better than the other asset
