There has been hullaballoo in the public arena court with regards to augmentation of real estate projects that are being advertised for auction in our daily newspapers.
True we need to be worried, even so worried, with this trend that we seem to have nested ourselves into. However, in our discourse of the possible derivatives to this, we must not be frugal with the truth.
Sunlight has to be the best disinfectant if we are to get the roots of this. We cannot play possum, as so it
seem.
That our economy has been hopelessly struggling isn’t a revelation anymore but a reality that nearly every Kenyan is living, or may I say majority of Kenyans. Every sector is feeling the pinch but somehow the public has continually expected the real estate sector to perform as before.
No other excuse, amidst our glaring economic tumble, can be attributed to the dwindling real estate investment return other than the ‘prophesied’ real estate bubble.
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We are really calling for it. In addition, we expect the real estate industry to condone, without recourse, every mediocrity thrown at it. Isn’t it true that nearly everyone expects that every house that is built must be sold regardless of how it was built or that every office building however carelessly conceived and executed should be fully occupied?
Anything contrary to this expectation has been blamed on the real estate market and an apparent bubble that is coming. Really? Which is this investment sector, outside real estate, that can accommodate every idea however reckless? Unknown too many, the real estate industry is a stickler for rules that must be carefully adhered to if returns is your dream.
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Slightly over a year ago, I wrote an article warning banks and investor against the lackluster, medieval approach they continue to practice in the real estate sector amidst the wild tides of the 21st century construction challenges.
I implored on them to renounce their obstinacy and change tact in their real estate projects financing model.
Many, to-date, haven’t and are reaping the benefits of their heedlessness.
How can we apportion such blame to real estate market? Isn’t it inherent in nature to reap what you sow? It is an unwritten rule that ‘if you don’t understand an investment opportunity well enough to explain it, don’t get involved.
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Yet majority of people consciously disregard this cardinal rule of investment and always jump into the real estate industry investment based on hearsays.
They inevitable suffer from the Kenyan bespoke investment syndrome of ‘I heard….‘ And without an iota attempt to even carry out a back of envelope feasibility to determine their projects viability, they enter this stubbornly fractured and highly fragmented industry based on gut feelings.
Yes they do. And when their projects inevitably fail, it is the market that is doing poorly and not individual mediocrity.
Everyone must start carrying their cross.
Listen, there is still attractive real estate boom returns than most sectors but its for the vigilant not the terminally indolent.
We must make this distinction going forward; for the record. The boom is for those who reverently enter this industry with sacrosanct respect for the rules not gamblers.
This is science not an art. Make no mistake, this industry is here to stay and for some time it will remain one of the most viably attractive for investment returns. But we must allow, without blaming the market, people with proclivity for greed and zero respect engraved real estate norm practices to continue counting their losses.
And painfully so. It is evident that in the past decade or so most housing developers not only here locally but across Africa have been targeting the high end market houses for development.
This market tier is sure getting saturated now. But-undoubtedly- housing still has huge housing need potential that is untapped. Nigeria has 17 million housing shortfall according to World Bank report.
Lagos alone has 4 million housing deficit, twice our accumulated national housing deficit of 2 million. The more reason I find it too pedestrian, laughable when pseudo real estate analyst crusade about housing bubble.
We must let nature do its checks on the industry and so far it’s commendable. Real estate companies have closed down and many more will, naturally, if they don’t obey real estate rule.
It doesn’t mean the sector is grumbling. Many people still have desire and plans to own a house, let’s be ingenious to meet their needs. We cannot continue to blame the real estate market and economy for mediocrity, No!
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