Two four-bedroom villas belonging to broadcast journalist Jeff Koinange were Monday put up for auction over a Sh130 million bank debt.
The houses in the high-end Kitisuru area sit on 0.67 acres and are each attached with a servant’s quarter. They will be sold when the auctioneer’s hammer falls on April 28.
NCBA bank is seeking to recover at least Sh65 million from the sale of each of the two villas over a debt that fell into default last year, says Garam Investments — which is leading the auction.
Mr Koinange, a former CNN journalist currently working with Citizen TV, is the latest prominent personality to have fallen into hard times as they battle auctioneers over unpaid bank loans.
They are struggling to hold onto their prime assets over mounting bank loans as Kenya’s economy slows down and repossessions pick up.
Mr Koinange was living in one of the villas and had rented the second one — which initially he had used for storing art pieces.
Garam say those seeking to buy the two villas through the public auction will need to place a deposit of Sh5 million ahead of bidding for the prime homes, which are currently valued at Sh200 million.
Default on mortgages have jumped in recent months, pointing to widespread distress in the real estate sector as Kenya’s economy slows down and property auctions pick up.
The mounting defaults in the property market are a reflection of the struggles that mortgage holders are undergoing in an economy that has witnessed a string of job losses in recent months across nearly all sectors as corporates intensify austerity measures to protect profits.
This has seen workers who took mortgages on the strength of their payslips default, with the slowdown in real estate hurting property developers who are finding it difficult to sell units that were built on loan.
Auctioneers reckon they held more auctions over the past two years linked to mortgage defaults, arguing that banks were moving much faster to seize properties from defaulters.
Unpredictable weather over the past two years, a bank lending slowdown and reduced economic activity are creating a growing pool of distressed borrowers whose assets are being seized by aggressive lenders.
Auctioneers say there is a glut on the market for repossessed homes and office blocks.
Former Cabinet minister Suleiman Rashid Shakombo lost his house in Kilimani over a debt while assistant minister Stephen Tarus is fighting to stop the auction of his Karen home.