MST-Department of Accounting and Finance

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Browsing MST-Department of Accounting and Finance by Subject "Affordable Housing"

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    Affordable Housing and Real Estate Investment in Residential Housing Sector in Kenya
    (kenyatta university, 2023) Ongaki, Sophia Moraa; Job Omagwa; Geoffrey Mbuva
    Affordable housing and determinants of real estate investments have received significant scholarly attention; however, there remains limited scholarship and consensus on the relationship between affordable housing and real estate investment growth in Kenya. Provision of affordable housing has remained a challenge in many developing nations including Kenya. Kenyan real estate investment especially the residential housing sector is facing poor growth rate due to its unbalanced focus. Residential real estate investment mostly focuses on the elite, high income earners while giving little focus to the majority who belong to the low and middle class households. The study aimed at determining the effect of affordable housing on real estate investment capitalization in the Kenya. It focused on identifying key indices of affordable housing in Kenya and recommended ways of increasing residential housing affordability to promote the growth of real estate investment through increased capitalization. Evidence indicates that majority of the houses constructed targets the elite and wealthy individuals hence majority of the housing units constructed remain unaffordable to the low-income earners, which affects residential real estate investment. The real estate market in Kenya has been on the decline owing to many factors, such as oversupply of high-end residential property and constrained access to credit facilities. The specific objectives were to: determine the effect of housing prices, household income, cost of mortgage, and moderating effect of inflation on real estate investment in the housing sector in Kenya. The study was anchored on permanent income theory, liquidity preference theory, anticipated income theory, rational choice theory, and decision theory. Positivism research philosophy and explanatory research design were adopted for the study. The study population comprised of real estate firms registered in Kenya. Using Census technique, a document review guide was applied to collect data from Real Estate firms registered by Estate Agents and Valuers Registration Board under Ministry of Land, Housing and Urban Development (N=80). The study adopted a 10-year period ranging from years 2010 to 2019. Data sources were: annual reports and financial statements from real estate companies. Data was analyzed using: Descriptive statistics, correlation analysis, and time series analysis. Data were presented in form of figures and tables. Diagnostic tests such as normality, multicollinearity, heteroscedasticity, stationarity and autocorrelation tests were conducted. Ethical considerations were observed to maintain integrity in the research process. The study found that housing prices, household income, and cost of mortgage all had a statistically significant effect on real estate investment in residential housing sector in Kenya. The study further determined that inflation had a significant effect on the relationship between affordable housing and real estate investment in residential housing sector in Kenya. The study recommends government’s cushioning prospective home owners from economic shocks and inflation, reduction of excessive taxes on construction materials, encouraging alternative income sources for households, the need for innovative financing in addition to provision of government tax incentives and exceptions/grants for private developers to build affordable residential units. The research effort further recommends that investors should find alternative sources of building materials.
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    Supply Side Determinants of Affordable Housing by Developers in Nairobi City-County, Kenya
    (Kenyatta University, 2022) Katola, Victoria Mumo; Joseph M Theuri
    The real estate sector, specifically the residential segment has been recognized by the government as one of the critical drivers in promoting sustainable economic growth in Kenya. However, it is difficult to attain this if the country lags behind in provision of affordable housing. Housing is one of the government’s economic agenda and this research intended to outline the supply side determinants of affordable housing by developers in Nairobi City-County, Kenya in the current period year 2022. The investment strategies were analyzed as independent variables are cost strategy, design strategy and information strategy. On the other hand, the supply of affordable housing as the dependent variable was anchored on the number of housing units provided by developers. The study was anchored on three theories namely; Theory of Demand and Supply, Modern Portfolio Theory and Decision Theory. The study adopted a descriptive research design to exhibit the relationship between investment strategies and supply of affordable housing. Further, the target population under study was all the fifty-three developers in operation in Nairobi city-county that are registered with Kenya Property Developers Association. A census study was applied to incorporate all the fifty-three developers. The study employed primary data collected using questionnaires administered to the respondents through a drop and pick method. The questionnaires used a five-point scale spanning from strongly disagree to strongly agree to evaluate the responses on the study variables. The collected data was analyzed using the SPSS program. The study was able to obtain a ninety three percent response rate with seven percent of the firms not responding with the allocated timelines for data collection. Correlation tests showed there existed a positive effect of cost strategy, design strategy and information strategy on the supply of affordable housing in Kenya. Regression tests showed that eleven point seven percent of the changes in supply of affordable housing in Nairobi City-County, Kenya are influenced by the Information Strategy, Design Strategy and Cost Strategy. The research concluded there is a positive and significant effect of supply determinants on the supply of affordable housing in Nairobi City-County, Kenya. The study recommends that more policy development should be undertaken to ease building regulation requirements and increase the efficiency of the permit process. The study also recommends the formulation of policies that would facilitate the adoption of alternative building technologies and materials which will help lower costs and increase the delivery of affordable housing in Kenya. The study further recommends that the government ensures it provides quality data through KNBS and during periodic census activities that would increase developers’ knowledge regarding affordable housing demand and supply metrics.