FACTORS AFFECTING GROWTH OF HOUSING UNITS IN KENYA FACTORS AFFECTING GROWTH OF HOUSING UNITS IN KENYA
Jomo Kenyatta University of Agriculture and Technology
The importance of secure property markets is fundamental to Kenya's economy particularly in light of the goals of Kenya Vision 2030, which sees real estate as one of the foundation pillars and a resource for the socioeconomic development of Kenya or any economy. Globally, China is undergoing significant growth in property development, South Africa either, (the first by continental standards) has the same trajectory but at a decreasing rate. Forms of financing, types of risks, alternative
... alternative building innovations and Property demand from commercial, residential and commercial is found to affect the development of housing sector. The study examined the recent trend in the development of housing units in Kenya for the last five financial years ending quarter 2, 2014. The study established and concluded that Property Loan market penetration is still low. The mortgage penetration though not the only key to house growth, is still very low either. High levels of inflation on the other side, currency and interest rates in 2011 and 2012 had negative impact on house prices, especially for those variable interest rate mortgages which were as high as 30%. The study also found that innovative building materials being available, but not yet fully established. These alternative materials can be advantageous. With regards to demand and supply, findings suggest that there is large formal housing deficit fuelling price hikes in Kenya. The three month study was done in Nairobi County and ended November 2014. The study adopted descriptive research design with a target population of seventy eight licensed property and real estate companies, a mortgage finance company and the forty four licensed commercial banks. Data was analysed using the statistical package for social scientist-SPSS V.16.0 to provide validity, descriptive, correlation and regression, and the nonparametric tests.