A bit more colour on the question regarding why Kenyan lenders are unable to offer long term mortgages. A bank makes money by charging the borrower an upfront fee for arranging a mortgage in addition to the interest charged over the term of the loan. Because the amount of capital a bank has on its balance sheet is finite, there's a limit to the amount of loans it can offer borrowers and would quickly run out of money to lend if it had to wait 20+ years to be repaid by the borrower. To address this issue, after a bank has provided a certain number of mortgages, it can group all these mortgages into one package (security) and then sell the security to investors. This is called securitization (CMBS). The investors in the CMBS are then entitled to the principal and interest payments paid by the mortgage borrowers over the loan term. As for the bank, having gotten it's capital back from selling the mortgages to investors, can now lend to new borrowers and collect another upfront fee. The bank repeats this process over and over again to generate fee income as part of its core business. This is the situation in Western countries which have much more sophisticated capital markets compared to Kenya's. Until recently, Kenyan banks did not have a the option of securitizing their mortgages, which is why there are so few mortgages in Kenya. The Kenya Mortgage Refinance Company (KMRC) was created in 2018 specifically to address this issue. Once KMRC is fully operational, Kenyan banks will be able to offload certain mortgages on their books to KMRC, which in turn will package those mortgages and sell them to investors by issuing bonds. If KMRC succeeds in its mission, Kenyan banks will be able to provide long-term mortgages to residential homebuyers, in line with those offered in Western markets (albeit with interest rates in the 8-9% range). This will result in a significant increase in the number of mortgages available to Kenyan homebuyers.

The government should do something, slums are sitting on 40% Prime lands in Nairobi, upgrading is needed. Good Analysis 🇰🇪

Very insightful and great conversation. Living to see the day the mortgage interest rates become lower and repayment periods are stretched to longer terms. This way lower and middle-class Kenyans will be able to service their mortgage payments periodically, ultimately achieving the rent-to-own tenancy option highly desired.

Economics is a strange discipline, very few people understand it but everyone feels the effects of it.

Ben is so informed on matters Real Estate. That is a very insightful discussion!

My opinion with empty houses is that kenyan real estate is very much inflated. There is no market controlled pricing rather it's like an auction type of deal. Someone decides to sell land out of random thought pricing.

I have met Ben in person and generally he is very insightful 👍

Great conversation. Thank you

Ben is deep and thorough in real estate. insightful discussion

We need a part two of this very important conversation for 2023 please. Thanks

Informative, thanks a lot Spice FM.

During the pandemic, New Yorkers migrated en masse to the suburbs of up state NY. ls it possible to attract digital nomads to Nairobi given the hub status and reliable fibre connectivity and sunny weather esp during the winter season in America/Canada.

I have never been more educated on real estate than I been here. One year late but worth it.

Lending to some people, who can not pay, is always a problem, this is a valuable lesson. Always borrow money, you can afford to pay back, even if it is paying in instalments, to clear the debt or the loan.

Very insightful analysis about mortgages and housing, in real estates or houses.

This guy has Data!!!

bring this man for another interview

Imagine getting a mortgage of 99yrs? It's means paying a monthly installments of less than 10k...! If this happens in Kenya then everyone will be a property owner

Rocksand Homes Ltd

Insightful

He has a decent grasp on matters real estate but his point of view is elitist The truth is there are too many vacant high grade office spaces and premium residences. Everyone was throwing money @ premium real estate assuming it is only the rich and corporates who need space when in truth it is the middle n lower income who needed space