MACROECONOMIC FACTORS AND PERFORMANCE OF REAL ESTATE DEVELOPERS IN NAIROBI COUNTY, KENYA

Ephraim Wambugu Weru, Dr. Benjamin Otwoko

Abstract


The government of Kenya has not been able to provide adequate housing to its citizenry and this has led to the mushrooming of many informal settlements in the urban areas. Most of the available housing units are occupied by the middle-income earners on rental basis while the high-income earners can afford to own houses. The general objective of this study is to establish the impact of macroeconomic factors on performance of real estate developers in Nairobi County, Kenya. Specifically, the study sought to examine the impact of Gross Domestic Product (GDP) on performance of real estate developers in Nairobi County, Kenya and to examine the impact of diaspora Remittances (Remittances from abroad) on performance of real estate developers in Nairobi County, Kenya. The study applied cross-sectional research design. . The study population comprised of all the registered Real Estate Developers operating in Kenya for the period 2015-2019. Accessible population was 78 real estate members of Kenya Property Developers Association. The study obtained all the secondary data on macroeconomic variables proposed for the study from the Kenya National Bureau of statistics (KNBS), Central Bank of Kenya (CBK) and the Hass Consult Property Index. The questionnaire responses were grouped into various categories for analysis using descriptive statistics. SPSS version 25 was used to analyze the structured questions while the use of descriptive statistics determined frequencies and percentages. The results were presented in prose, tabular and graphical form. The study concludes gross domestic product has a positive and significant effect on the performance of real estate developers in Nairobi County, Kenya. The study also concludes that diaspora remittance has a positive and significant effect on the performance of real estate developers in Nairobi County, Kenya. Based on the findings, this study recommends that the government and central bank should implement measures to stabilize or reduce interest rates to support the performance of real estate developers in Nairobi County. Specifically, policies that promote access to affordable financing for developers, such as offering low-interest loans or creating mortgage-backed securities, would help mitigate the negative impact of high interest rates on real estate development

 

Key Words: Gross Domestic Product, Diaspora Remittances, Macroeconomic Factors


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References


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