This archive report was first published on 14 May 2020.
Published on May 14, 2020, a report by The Standard highlighted the risks associated with buying houses off-plan. This practice, where buyers purchase properties before they are built, has gained popularity in Kenya.
Real estate firms like Mizizi Africa Homes have successfully launched off-plan housing projects, such as Penguin Estate, which sold out in just three months. However, this trend also raises concerns about the potential for developers to engage in fraudulent activities, leaving buyers with significant financial losses.
According to Paul Maurice Syagga, a land economics expert at the University of Nairobi, off-plan housing units are often purchased at a discounted price, but this comes with significant risks. 'The developer may be so ambitious to start a large project with the hope that buyers are forthcoming. The project stalls if there are no enough investors,' Syagga warned.
Kenya lacks clear regulations governing off-plan sales, making it easier for developers to take advantage of unsuspecting buyers. Syagga noted that it is also possible for developers to operate a pyramid-like scheme, fleecing investors of their money.
As a result, many house-buying schemes have collapsed, leaving thousands of investors in misery. It is essential for buyers to be aware of the risks involved in off-plan housing and to exercise caution when investing in such projects.
