THE GHOST HOUSES OF NAIROBI SUBBURB
Economic scourge heightened with student loans and mobility preferences ranks as impediments to millennial home ownership scaring them away from the city up markets
A routine drive around Kenya’s major cities is normally decorated with enticing billboards, showcasing luxurious homes that the millennial would rather not purchase as the country plungers into a financial crisis, reveals a 2019 report by leading real estate consultant Knight Frank. The research reveals that the growth of luxury homes registered its lowest rate of annual growth since the final quarter of 2009 when the global world economy underwent a financial turmoil, the rate of wealth creation globally slowed in 2018 and is yet to fully recover, adds the report.
The financial cringe has transcended in in the upmarket regions Nairobi signified with pin drop silence and pitch darkness in the units yet to be occupied, indicating gloomy profits for investors. Since 2009, house prices in the posh suburbs have witnessed over 6.5 percent drop according cumulative reports from the real estate giants. The drop was to a faint effort to bid more buyers.
“We have seen an increase in distressed properties in the market as reflected by advertised property auctions. Additionally, developers are offering generous terms which continue to suppress prices and rents to the point where investors are opting for safer short-term investments while they cherry pick the best bargains in the market,” said Sakina Hassanali, Head of Development Consulting and Research at Hass Consult ,a leading real estate developer in the East Africa region.
The Prime Global Cities Index (PGCI) tracks the movement in luxury residential prices across 45 cities where Nairobi dropped in ranking to 42nd out of the 45 locations tracked by the global index. Some of cited backdrops are linked with the international policies that had a global impact. In the first quarter of 2019, the threat of a global trade war loomed, uncertainty surrounding Brexit peaked and the International Monetary Fund (IMF) projected that 70 percent of the world’s economies would experience a slowdown in growth in 2019.
Neighborhoods in posh estates in Nairobi charge at least 120 million which far decry for many average Kenyans. In Kenya, the uptake of mortgages and loans had experience a sharp decline. Coupled with harsh economic times, and the stalled lending by banks to average earners, more millennial have shifted preference to affordable housing, according to the Central Bank of Kenya.
“Following interest rate capping a number of borrowers has been shunned by banks. Since the commencement of the interest rate capping law, the number of loan accounts has declined significantly, reflecting lower access to small borrowers and larger loans to more established firms,”
Shifting millennial priorities
Media recognizes millennial as people born between early 80s and 2000s.Most of these Kenyans are in their twenties and thirties. They trapped in education debts and securing their jobs as their top most priorities. Kenya has yielded thousands informal jobs in the infrastructure and manufacturing sector that are not stable enough to guarantee longevity in income. According to World Bank, 60 percent of the working age population in Kenya was employed in 2005, and this has increased significantly to 76 per cent, in 2015.
“In Kenya, only six per cent of total employment is in the formal non-agricultural sector. Almost half of total employment, 49 per cent, is informal non-agricultural employment, with the remaining 45 per cent employed in agriculture,’’ the report says.
The rest of millennial in formal sectors are focused in establishing their niche up the corporate social ladder corporate ladder which makes them shy away from long-term financial obligations which come with buying a home. Millennial also prefer staying close to business districts on rent as residential apartments there are relatively costlier to buy.
In the sense of mixed-use zoning or mixed-use planning, it is a type of urban development, urban planning and/or a zoning type that blends residential, commercial, cultural, institutional, or entertainment uses into one space, where those functions are to some degree physically and functionally integrated
The idea of a single building where you live, work and play may seem very much of the moment, driven by advances in communications technology. But mixed-use developments have been around for as long as mankind. Research has revealed that complex cave systems hosted multiple uses hundreds of thousands of years ago. The Romans built large multi-use complexes across their empire. And during medieval times, people used to manufacture, sell and live in the same building.
Connectivity to the workplace, convenience and security is important, but owning their own home, not that much so. Due to the nature of their jobs, millennial seek mobility and geography. Renting offers more flexibility and freedom of moving base when a more exciting job opportunity presents itself.
Much has changed since industrial times. The gradual move from a “manufacturing” to a “services” era, the growth of specialised fields of expertise and advances in communication have all meant that organisations could operate at a smaller scale, giving more people the opportunity to work from home.
Sustainability has become an increasingly important consideration over the past few decades. As a growing body of research shows that flexible spaces can be more economically viable and land efficient, mixed use schemes are gaining popularity once more. In some countries, legislation and financial incentives embrace the view that all different aspects of life can successfully be performed at a local level, in a shared place.
Growing population densities in cities, intricate property ownership models and the need to share limited land resources all present a challenge to changing the way people live and work. Urban designers are learning to allocate different activities and various levels of privacy within one space, while resolving all the increasingly complex technicalities of contemporary city life. Virtual reality and global communication systems are connecting people around the world. But they also detach people from those they are closest to. A built environment that keeps people together and offers more opportunities to meet could mitigate this problem.
Lives are becoming more fused, and the boundaries between family life, social life and work, are gradually disintegrating. In response, the built environment must adapt, offering greater flexibility and efficiency, while helping citizens to reach for a richer, healthier, happier future.