Muke Ya Muzungu
JF-Expert Member
- Jun 17, 2009
- 3,444
- 264
John mashaka bounces back with housing blues
In the aftermath of the Global economic meltdown, many economists and financial experts have been gripped with criticism for the failure to foretell of a disaster that came to change the way we see things economically. Vital signs and indicators that could have averted the disaster became less significant at the expense of a few men controlled by greed. Likewise, Tanzanias housing market has every indicator that needs immediate review before the countrys economy is decimated. The up, up and up trend in the land and housing sectors are not going to reach stratosphere before they crumbles
High rise luxury apartment buildings are snaking their way into the city skies. Already built houses and land are increasingly becoming untouchable for the poor majority as their talks are in US Dollars. Meaning, only a handful will be in position to rent, purchase land, and even build homes.In my effort to invest back home, I started tracking land prices in 2007, and surprisingly enough, from Dar es salaam to Bagamoyo, very little of land is available. Most of it had been purchased years ago by a few individuals who are now selling it at shocking prices
One of my neighbors who is a well placed high-ranking government official purchased a five-acre land in 1994 for Tsh. 800,000. The man is selling the same piece of land today for USD $500,000. A shocking price, in a country ranking as one of the poorest and least developed in the world, whose income per capita is less than $350. Many decent houses in the city charges from $1500 to $16,000 per month, far more expensive than Floridas exclusive West Palm Beach and other wealthiest American and Canadian suburbs
A few days ago, I happened to meet two expatriates; one an American and another one Chinese, who share two things in common, they are both renting from high ranking government officials, and both experiences a 10% annual increase on their rent. A frustrated American working for a Non-profit organisation is renting a three bedroom home in Masaki for $3,800; a price he termed to be too high for housing in a third world country, while he used to pay $1,075 for a better home in Richmond Virginia. The man is only waiting for his contract to end so he can leave, since he is basically working to pay rent in Tanzania
Many Tanzanians are also faced with a similar challenge, forced to take loans just to secure decent housing for their families. United States has one of the most developed housing markets, and highest concentration of millionaires in the world, yet even modest income earners can afford to rent and own luxury apartments and homes. Top earners in the financial industry in Manhattan, are having comparatively better chances, to get better rental deals than expatriates in Tanzania
Truth of the matter is that, these homes and apartments are being built for foreigners and wealthy people with access to foreign currency, not the working class, because very few ordinary Tanzanians can afford $400 rent a month. Tanzanias housing market growth is defying the natural economic laws of exponential growth. Demand, Income (earning power) must, at all times be proportional to the supply in order to attain an equilibrium point.
An assumption is that, Tanzanian housing market is free and open. The theory would then predict that market forces would control supply and demand, and thereby distribute housing in a fair and equitable manner. Is this the reality? NO. Only the wealthy have access to decent housing, unfortunately! We must be realistic with the fact that, Tanzanias housing market is very young and disorganized. It is extremely artificial and vulnerable to withstand serious political shock, social and economic changes.
Its artificial nature is not going to survive the usual economic life cycle, or the growth face of the exponential curve, before it collapses bringing down the entire economy to its knees. The housing market is ignoring the obvious economic factors that dictate housing prices; income distribution, market demand and competition, economic conditions, and government of the days actions and policies.
Should the government decide to decentralize to Dodoma for instance, should the shipping hub move to Bagamoyo, Mtwara, or Tanga, should the government of the day change its tone to contain corruption, without a doubt, an economic tsunami is surely going to hit Dars housing market, and its ripple effect will be will be felt across the entire spectrum of national economic sphere. Not to mention the change of political winds that could potentially prune or keep away foreign expatriates who are the darlings of the housing market.
For long term strategic security of Tanzania, which I believe our leaders and state planners have foreseen; government (administration), industrial, and maritime decentralization will similarly impact the Dar- es-salaams housing sector in a similar devastating fashion. People should no longer believe that markets are self regulating following how a few people in the name of free market toyed with the world economy bringing about economic bubble and desolation. There must be some kind of oversight or regulation to tame the situation from going out of hand in Tanzania, bearing in mind the obvious current signs on the wall.
Land and Housing Authorities should explain to the public steps they have taken, or plans they have in place to contain or control these very vital sectors; so important to the countrys security and economic future from collapsing. The government cannot let madalali brokers with little knowledge of the housing market to dictate prices at the expense of their lust. It cant let control of the land and housing into the hands of a few who in turn dictate the pricing on where we live and sleep. Meaning if you cant steal or engage in corruption, decent housing becomes a dream
In Bunju B, a land that was selling for Tsh 80 million jumped overnight to Tsh 120 million because of a dalali who wanted to solve his financial problems in one day. Thanks to a Somali businessman, who was able to produce the amount in cash putting to rest my offer. How many sorts of people buy land in Tanzania, builds, rents out and charges any price they want in US Dollars, as if a government does not exist
These men (Dalalis) with no training or knowledge on how markets work must be made to justify their crazy prices, and identities of the people they represent. I would not be unfair to say that, most of the Dalalis are a big danger to the countrys national security, since they serve as conduits to illegal criminal cartels seeing Tanzania as a safe haven where you can either rent or buy land and perhaps build with ease. It must control who owns the land, to keep at bay the Squatter style housing which are rapidly cropping up in river banks due to land and housing scarcity in the city
And if you are wondering on my assertion, ask yourself, why would someone carry Tsh. 120 million in a Range-Rover trunk? Are these some of the people controlling our housing market? My dismal assertion concludes that, if indeed our housing sector is being controlled by MAFISADIS and people carrying large sums in the trunk of their cars, then we are in for a big trouble!
Not the future generation, but the current generation is yet to pay a price for this artificial housing market keeping ordinary legitimate and honest workers NON-FISADIS from buying land, and instead building on dangerous river banks.
Mungu Ibariki Tanzania
John Mashaka
Dar-es - Salaam, Tanzania
TANZANIAS ARTIFICIAL HOUSING MARKET,
HOW LONG WILL IT HOLD - DEBATE!In the aftermath of the Global economic meltdown, many economists and financial experts have been gripped with criticism for the failure to foretell of a disaster that came to change the way we see things economically. Vital signs and indicators that could have averted the disaster became less significant at the expense of a few men controlled by greed. Likewise, Tanzanias housing market has every indicator that needs immediate review before the countrys economy is decimated. The up, up and up trend in the land and housing sectors are not going to reach stratosphere before they crumbles
High rise luxury apartment buildings are snaking their way into the city skies. Already built houses and land are increasingly becoming untouchable for the poor majority as their talks are in US Dollars. Meaning, only a handful will be in position to rent, purchase land, and even build homes.In my effort to invest back home, I started tracking land prices in 2007, and surprisingly enough, from Dar es salaam to Bagamoyo, very little of land is available. Most of it had been purchased years ago by a few individuals who are now selling it at shocking prices
One of my neighbors who is a well placed high-ranking government official purchased a five-acre land in 1994 for Tsh. 800,000. The man is selling the same piece of land today for USD $500,000. A shocking price, in a country ranking as one of the poorest and least developed in the world, whose income per capita is less than $350. Many decent houses in the city charges from $1500 to $16,000 per month, far more expensive than Floridas exclusive West Palm Beach and other wealthiest American and Canadian suburbs
A few days ago, I happened to meet two expatriates; one an American and another one Chinese, who share two things in common, they are both renting from high ranking government officials, and both experiences a 10% annual increase on their rent. A frustrated American working for a Non-profit organisation is renting a three bedroom home in Masaki for $3,800; a price he termed to be too high for housing in a third world country, while he used to pay $1,075 for a better home in Richmond Virginia. The man is only waiting for his contract to end so he can leave, since he is basically working to pay rent in Tanzania
Many Tanzanians are also faced with a similar challenge, forced to take loans just to secure decent housing for their families. United States has one of the most developed housing markets, and highest concentration of millionaires in the world, yet even modest income earners can afford to rent and own luxury apartments and homes. Top earners in the financial industry in Manhattan, are having comparatively better chances, to get better rental deals than expatriates in Tanzania
Truth of the matter is that, these homes and apartments are being built for foreigners and wealthy people with access to foreign currency, not the working class, because very few ordinary Tanzanians can afford $400 rent a month. Tanzanias housing market growth is defying the natural economic laws of exponential growth. Demand, Income (earning power) must, at all times be proportional to the supply in order to attain an equilibrium point.
An assumption is that, Tanzanian housing market is free and open. The theory would then predict that market forces would control supply and demand, and thereby distribute housing in a fair and equitable manner. Is this the reality? NO. Only the wealthy have access to decent housing, unfortunately! We must be realistic with the fact that, Tanzanias housing market is very young and disorganized. It is extremely artificial and vulnerable to withstand serious political shock, social and economic changes.
Its artificial nature is not going to survive the usual economic life cycle, or the growth face of the exponential curve, before it collapses bringing down the entire economy to its knees. The housing market is ignoring the obvious economic factors that dictate housing prices; income distribution, market demand and competition, economic conditions, and government of the days actions and policies.
Should the government decide to decentralize to Dodoma for instance, should the shipping hub move to Bagamoyo, Mtwara, or Tanga, should the government of the day change its tone to contain corruption, without a doubt, an economic tsunami is surely going to hit Dars housing market, and its ripple effect will be will be felt across the entire spectrum of national economic sphere. Not to mention the change of political winds that could potentially prune or keep away foreign expatriates who are the darlings of the housing market.
For long term strategic security of Tanzania, which I believe our leaders and state planners have foreseen; government (administration), industrial, and maritime decentralization will similarly impact the Dar- es-salaams housing sector in a similar devastating fashion. People should no longer believe that markets are self regulating following how a few people in the name of free market toyed with the world economy bringing about economic bubble and desolation. There must be some kind of oversight or regulation to tame the situation from going out of hand in Tanzania, bearing in mind the obvious current signs on the wall.
Land and Housing Authorities should explain to the public steps they have taken, or plans they have in place to contain or control these very vital sectors; so important to the countrys security and economic future from collapsing. The government cannot let madalali brokers with little knowledge of the housing market to dictate prices at the expense of their lust. It cant let control of the land and housing into the hands of a few who in turn dictate the pricing on where we live and sleep. Meaning if you cant steal or engage in corruption, decent housing becomes a dream
In Bunju B, a land that was selling for Tsh 80 million jumped overnight to Tsh 120 million because of a dalali who wanted to solve his financial problems in one day. Thanks to a Somali businessman, who was able to produce the amount in cash putting to rest my offer. How many sorts of people buy land in Tanzania, builds, rents out and charges any price they want in US Dollars, as if a government does not exist
These men (Dalalis) with no training or knowledge on how markets work must be made to justify their crazy prices, and identities of the people they represent. I would not be unfair to say that, most of the Dalalis are a big danger to the countrys national security, since they serve as conduits to illegal criminal cartels seeing Tanzania as a safe haven where you can either rent or buy land and perhaps build with ease. It must control who owns the land, to keep at bay the Squatter style housing which are rapidly cropping up in river banks due to land and housing scarcity in the city
And if you are wondering on my assertion, ask yourself, why would someone carry Tsh. 120 million in a Range-Rover trunk? Are these some of the people controlling our housing market? My dismal assertion concludes that, if indeed our housing sector is being controlled by MAFISADIS and people carrying large sums in the trunk of their cars, then we are in for a big trouble!
Not the future generation, but the current generation is yet to pay a price for this artificial housing market keeping ordinary legitimate and honest workers NON-FISADIS from buying land, and instead building on dangerous river banks.
Mungu Ibariki Tanzania
John Mashaka
Dar-es - Salaam, Tanzania
