- Buying a house off-plan also allows for flexible payment as all one needs is a deposit, which is usually 10 to 20 per cent of the purchase price.
The news that Urithi Cooperative Society and Suraya Properties Limited have run into headwinds has added more Kenyans to a rapidly increasing list of investors whose wish to own homes has turned to a nightmare.
With an average home loan size standing at Sh10.9 million, repayable in 12 years, according to Central Bank data, very few Kenyans can afford to own a home through bank financing or by constructing using their own cash.
A good number opt to save and access loans through saccos. Buying off plan, which entails acquiring a property when it is still under construction in order to get discounts, has also become a popular option lately.
Buying a house off-plan also allows for flexible payment as all one needs is a deposit, which is usually 10 to 20 per cent of the purchase price.
The rest of the amount is either paid upon completion, or in flexible periodic instalments.
This allows individuals without financial muscles to own homes they would otherwise not afford.
However, an increasing number of saccos and real estate firms are reeling under the weight of a poorly performing economy, mismanagement, bad investment decisions, fraud and bad loans that are now threatening the collapse of the crucial sector.
If the trend goes unchecked, it could have far reaching damages.
On Tuesday, the family of former politician Njehu Gatabaki denied ever getting into an agreement with Suraya for the development of Four Ways Junction.
This further compounds the company’s problems, whose prime property elsewhere is already facing the hammer.
This is as desperate investors continued flocking the Directorate of Criminal Investigations (DCI) headquarters for the second day to record statements in the hope that the government will help recover their money from Suraya.