Kenyans continue to lose multi-million homes and other property to auctioneers, amid tough economic times witnessed across the country.
In a series of adverts published in local dailies on Monday, December 5, several auction companies put up residential homes in Nairobi and its environs for sale through the auctioneer’s hammer.
The Daily Nation had seven pages of auctioneers calling for bids on four-bedroomed maisonettes and other residential properties in Lang’ata, South C, Kiambu, Juja, Kitengela and Ruiru.
A house under construction in Kenya
Interested buyers will only have to part with a fraction of the costs of the house that the initial owners paid to secure the homes.
“A deposit of 25 per cent must be paid in form of a banker’s cheque at the fall of the hammer. The balance will be payable within 90 days,” one of the adverts read in part.
Landlords owning residential plots are also among those who lost their real estate investments.
“Immediate access road is murram, and public and social amenities are readily available in the neighbourhood. Estimated monthly income is Ksh50,000,” another advert read in part.
The majority of the properties were placed on sale to recover money from unpaid loans and mortgages which had been defaulted.
Apart from residential properties, agricultural farms, cars, manufacturing, construction and farm machines were also put up for sale.
In 2022, the number of properties going up for sale shot up with the number of individuals and companies defaulting on loans increasing.
Speaking to Kenyans.co.ke, economist Professor XN Iraki explained that the surge in auctioning of the property was an indication of a dwindling economy not just in Kenya but in the world.
He acknowledged the impact of global matters such as the Coronavirus pandemic and the Ukrain-Russian war on the number of defaults.
“Most people took loans using their homes and businesses as securities and could not service them when they lost their jobs during the pandemic,” Iraki stated.
He explained that Kenyans can avoid this by only taking loans when necessary and investing in diverse portfolios when taking business loans.
“Most Kenyans do not know that they can insure loans such that if they default on any credit, the insurance pays up. The government can also step in to guarantee the loans,” Iraki expounded.
An upward review of the minimum lending rate by the Central Bank of Kenya (CBK) also raised the lending rate despite most Kenyans earning the same or lower income.
Another contributing factor is inflation, with a report by the Kenya National Bureau of Statistics (KNBS) placing the inflation at 9.5 in November, an increase of 3.7 points from the same period in 2021.
image of homeless people sleeping in Nairobi streets dated July 6 2020
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