It seems to be the wisest thing to do in this day and age, buy an eighth acre piece of land somewhere close to Nairobi and hopefully build yourself a house someday where you can move in and stop paying rent. Even if you do not build, the value of the land will rise and you will sell at a profit.
This narrative has been drummed into our minds so hard, complete with live examples, making people yearn for the day they will own a piece of an eighth acre of Kenya. Places like Rongai, Kitengela, Ruai, and Ngong which were not so long ago forests are now vibrant urban centres with plots that were selling for several hundred thousand a few years back now fetching millions of shillings.
The result has been a booming business in the land sector. Every Kenyan with means has gone into the land buying frenzy. Huge loans have been taken up to finance land purchases. The title deed has become one of the most prized possession in Kenya today.
The trend having caught up with everyone, the demand for eighth acre pieces of land has gone over the roof. Property companies have gone into the overdrive to get properties to satisfy these demands. Large chunks of land, many kilometres from Nairobi, in places that qualify to be wildlife zones, have been subdivided and are sold as ‘gated communities’ and ‘controlled developments’ complete with artistic impressions showing club houses and golf courses, a lifestyle that many Kenyans especially in the growing middle class, yearn for.
These eighth acre plots also sell at a ‘bargain’, at least if compared with the 1/2 acre pieces of land in Runda and Karen retailing at Kshs 30Million, paying upto Kshs 1Million for 1/8th acre seems to be a really good deal.
This is a high-level scam and several myths are being used to drive this it. These need to be debunked.
Land is a ‘high return’ investment
It is not. If anything, it has the lowest return on investment if looked at against many other forms of investments available. The only way to venture into land buying as a business is to purchase large chunks, subdivide into smaller pieces and sell to the misled population which either hopes to build there someday or maybe sell at a profit. If you buy you 1/8th in Kamulu today at Kshs 800,000, try selling it in one year and see what you can earn from it. NOTHING.
Reselling a 1/8th piece of land in such areas is almost impossible. Such purchases only make sense to the first buyer. If you had bought a piece of land 80KM from Nairobi three years ago with the hope the place develops so that you sell, how do you use the same story to convince the second buyer?
These places, far far from Nairobi, will one day grow into big settlements where you can live as you work in Nairobi
Well, not in your lifetime. It may not even in your children’s lifetime. The growth of Kitengela, Ngong, Ruiru, and others had been anticipated in the 1970s. It is only that the information was not in the public domain. This was due to the fact that the city was to grow and nearby metropolis had to come up to support the cities. Such metropolis had to be a certain distance from the city for them to function properly, and to make sense. Places like Kamulu, Isinya, OleTepes, and many others almost a hundred kilometres from the city were out of this ring.
This myth also ignores the limits of the city’s growth. If a city had no limits to its growth, countries that have had civilizations for the past three to five centuries will be having buildings dotting every available piece of land. They do not. This myth implies that one day, houses and buildings will dot the landscape all the way from Bomas to Magadi town, Komarocks to Kangundo town and even Kitengela to Kajiado. This is wishful thinking. It will never happen.
Land should be looked at for exactly what it is, a factor of production. You buy it, put it into some immediate use and let it give you income. It is not advisable to sink in your money in some idle land expecting the value to rise so that you can sell.