IS IT TIME ZERO FOR KENYA’S REAL ESTATE SECTOR TO FOCUS ON QUALITY’

In order to achieve better living standards for her citizens, every emerging country has to go through several phases. Unfortunately, the focus is mainly on quantity and not quality. People care only about today and not for the future.

For sustainable growth and better standards of living, it is a basic requirement to include quality and planning. Over the last few years, Kenya has been on a fast forward movement. Its economy, at first sight, seems to be booming. The average standards of living are getting better in theory, and people are investing their future in promising sectors like the real estate, but is it really exactly like that?

If we take as a case study of Nairobi, which is the heart of Kenya and the east Africa region, we will easily realize that the city has changed tremendously over the last 10 years. High-rise buildings, shopping malls, office blocks and apartment blocks have been built everywhere. Its population increased by almost 2,000,000 people within the last decade reaching a total of 4,600,000 people respectively. Life has changed in the capital city of Kenya, but is it really better now than before?

There are different opinions. Some argue that Nairobi is a great place to stay, comparing Nairobi with other regional cities. What about comparing Nairobi with a western city a European Capital, Asian or one in the Middle East, even one from the ex Soviet Union countries?

The reality is that the city of Nairobi has been growing with an amazing impressive pace but with absolute lack of planning. That is represented today in the daily life of anyone who decides or has to live in Nairobi. Incredible traffic, lack of electricity, water, drainage, transportation, road network, traffic lights, sidewalks, security etc. On top of the insufficient planning and urban infrastructure coming from the public sector, we have to add the private sector’s greediness. Over the last 10 years, developers have been building with only one aim, one target, and one plan, sacrifice everything in order to maximize the profits. I have to admit that I believe in free market and I love making profits but I also believe that in order for a free market to operate properly, we must have rules and the means to control everyone in the market, make sure that rules are followed without exceptions.

For Kenya unfortunately this does not apply. The country seems to be unable to follow up with the uncontrolled growth and it looks like it has lost control. With every passing day, Nairobi becomes harder to live in. It is not a secret anymore that as the city is growing, problems are growing too.

Apart from the direct effect in the daily lives of those who live and work in the city, there is a very important side effect. A city that is not providing basic infrastructure and is not attractive for people to stay, will directly affect the real estate market. Less people will cause less demand, and the oversupply will lead to price fall.

 

Building a society while trying to create a better future requires a very good foundation and fundamentals. It is a must for the society to require quality and it is a must for the official government to be able to secure that. In 2015, a capital city should not be under the threat of floods and people should not die just because it rains. Buildings should be at least safe enough in order not to collapse without any reason just because of bad quality construction.

Every society has its own problems, Kenya is not an exception, but the very recent challenges of buildings collapsing in various locations have been giving the various arms of government and the people of Kenya sleepless nights. This is due to the enormous loss of huge investments in housing, properties and human life. The major challenge on the issue of building collapsing is that individuals differ radically on who to blame for the major cause of these tragedies. The same applies to the recent floods that cost the country so many lives, collapse of buildings and destruction of properties. One can easily review the problem with a couple of words, “Lack of quality”

People buy new houses and after a couple of months they need to start maintenance due to bad quality. The non-existing quality standards of Real Estate in Kenya are the guarantee that whoever decides to invest into this market should be prepared to face big expenses to keep basic standards. In the past, buying of-plan was a big catch for those who took the risk to buy off plan based on 3d designs and developer’s promises. The roads around the city have to be constructed again and again due to bad quality. With every rain, most of the roads are flooded, people are stuck in traffic for hours if not killed. The list is endless. I could go on forever pointing out different examples of bad or absolute lack of quality but that is not the point.

Everyone should understand the advantages of a well-planned urban city. The advantages of basic standards of living provided to the citizens. The need for the average person to be able to enjoy a better life provided by correct planning.

Imagine a city where the road system was carefully planned and the road network easily supports the millions of cars. Picture this; if only on a busy week day, driving anytime from south C to westlands could take 10 minutes, if only you had alternative options for transportation. Nothing fancy, maybe public means like busses provided by the government and maybe bus lanes in order to avoid traffic and keep vehicles moving. Imaging a city with traffic lights and people who respect them. Imagine if we had sidewalks and you could walk without jeopardizing your lives and without walking in the mud. Imagine if there was a water network around the city so that everyone would have access to clean water and would not risk to get typhoid, and what about having electricity. I know that some will think that I am asking too much, but is it really too much? That is what is considered to be basic requirements for any other non-African city around the world. Water, electricity, drainage, transportation, schools, safety are basic things provided by any modern city.

Some people might say it is too late, this city has already been build. I say yes, maybe, but what about now, tomorrow, the future. Developers keep building everywhere. The government cannot follow up with equal infrastructure projects. The economy cannot support this kind of needs. Maybe we should regulate and stop building inside Nairobi. Maybe we should reconsider what we expect from Nairobi.

What if Nairobi grows and becomes a huge monster, like the ones we see in the movies, big and ugly. No one is doing something about it. What will happen in a few years if Nairobi will have 6 million citizens? How are Nairobians expected to live in this city? How do we expect to attract foreign investors? How often will the city be without electricity? How long will it take to drive around the city? Nairobians have to wake up at 5:30 am in order to be on time at work (around 8:30 usually). Soon we might be staying and sleeping at our working places, as spending 5 hours per day in transportation makes no sense.

Supposing we do not care about all that, assuming we enjoy living under these circumstances, did you ever wonder how all that is affecting the real estate market? Already, companies are moving outside the Nairobi CBD. Foreigners prefer to stay outside Nairobi and very few decide to invest in a city that has to face all these challenges. Those who invest need to spend a fortune day after day repairing the poor quality properties they bought. Bad quality properties lose value daily. The argument made here clearly points to the fact that this is not a sustainable market. This is not a city where people can live and enjoy.

Quality and planning must become priority for everyone. From the officials to the common mwananchi, we all have to embrace quality and planning, before the city becomes the monster that will eat its kids. It takes more than building houses and office blocks to make a city beautiful. A city that people will be referring and comparing equally to any other city on the planet. The kind of a city that we all deserve.

 

Written by

Kosta Kioleoglou

REValuer (Tegova)

Civil Engineer Msc – DBM

 

for Nairobi Business Monthly (www.nairobibusinessmontlhy.com)   Vol4 Issue No5 September 2015

http://www.nairobibusinessmonthly.com/columnists/is-it-time-zero-for-kenyas-real-estate-sector-to-focus-on-quality/