Our thirst for land will worsen, so what will we do ?

Last week saw the release of two property reports.

One was by Knight Frank, who manage and advise on property developments such as malls. The other was by PRC, who mainly focus on developing affordable land and housing for lower and middle-income buyers.

Knight Frank reported that land prices have peaked at the top end, with slight declines in rental incomes. They also noted flat office rents as well as a gap in logistics, warehouse and manufacturing spaces which they said were prime opportunities.

Meanwhile, PRC observed gains in prices that it attributed to rural-urban migration and a rising middle class. They reported that land in Ruaka had appreciated by 125 per cent from September last year and that one eighth of an acre was going for Sh18 million. Land in Kiserian and Utawala has also appreciated greatly. 

To cushion buyers, developers allow installments of up to six months and many have partnered with banks, saccos and microfinance institutions to advance loans to buyers.

Some cruel sides of our land story were also on display last week. First, there was a planning advertisement that was widely shared, but now disowned by the Nairobi County government, in which someone sought to change the land use of a property from cemetery to apartments.

It showed that developers are not focused on building amenities. Apartments and office spaces are replacing vital things like factories, schools, and cemeteries. 

EXPIRING LEASES

With the growing sprawl of development into farms, and plains in the north and south of Nairobi being turned into houses, infrastructure and services such as sewers, side roads, street lights, pavements and garbage collection are all things that residents have to invest extra money in if they want them.

There was also the story on TV of a family in Westlands who had their home flattened over a land dispute. This highlighted another uncomfortable land issue, which is the expiry of 99-year leases.

Leases for many prime properties in Kenya were issued between 1900 and 1930 and they are now expiring. Leases held by foreigners were changed from 999 to 99 years by the new Constitution.

It is very unfortunate that elderly people, some of whom have lived in houses for over 20 years, are the main targets of people who connive to take over legal ownership, then move to evict residents from their property. 

Other conclusions in the Knight Frank report were that a lot more property development would happen after the 2017 elections, and that this would not be a bubble.

While some people are waiting for the property bubble to burst, Knight Frank says the fundamentals don’t support that.

Just yesterday, Nairobi Governor Evans Kidero said that the city’s population, which had grown from 300,000 to four million in 54 years, was projected to reach 14 million by 2050. Quality housing, already scarce today, is going to be a priority.

The pressure on land will only grow.

Twitter: @bankelele