Critical Factors and Real Estate Development by Private Developers in Kiambu County, Kenya
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Date
2018-12
Authors
Muiruri, Christine Wambui
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
The real estate sector in and which was previously dominated by individual developers has
now seen entry of more institutional developers such as SACCOs, private equity firms and
foreign institutions in major towns around the country. The industry however continues to
face challenges such as unfavorable interest rate environment and rapid population growth
which is creating increased demand for housing, as families grow and consumer needs change
to reflect independent living. It is in this light that this study sought to investigate the critical
factors of real estate development by private developers. The study’s specific objectives were
to: assess the role of access to finance; evaluate the role of off-site infrastructure; analyze the
influence of land regulation and; examine the effect of technical innovation on real estate
development by private developers in Kiambu County. Using descriptive research design, the
study targeted 280 respondents that consisted of 120 finance managers and 120 engineers
drawn from 18 registered real estate development firms as well as 20 land officials and 20
planning officials from Kiambu County. Using stratified random sampling procedures, the
study sampled 84 participants that consisted of 36 finance managers, 36 engineers, 6 land
officials and 6 planning officials; however, only 69 participants fully responded to the
questionnaires. Data analysis was done using descriptive statistics and regression analysis
methods. The study established that access to finance, offsite infrastructure, land regulation
and technical innovations have a positive and significant effect on real estate development by
private developer in Kiambu County, Kenya. The study concludes that various factors play
significant roles in access to finance for development by private developers, among them
availability of sources of obtaining finance, security requirements, eligibility requirements
and interest rates. Offsite infrastructures significantly affect real estate development by
private developers and increases in the activities involving offsite infrastructures would most
likely reduce real estate development by private developers. The study concludes that land
regulations significantly affect real estate development and that increases land regulations
promotes real estate development by private developers. The study further concludes that
technical innovation significantly affects real estate development and that increases in
technical innovation promote real estate developments by private developers. On access to
finance this recommends that the banking institutions needs to come up with appropriate
policy framework that supports and promotes private developers efforts in reducing the
housing gap in the country. On offsite infrastructure, the study recommends that the County
government of Kiambu County should improve the road condition, provide communication
infrastructure, availability of drainage systems, the presence of social amenities and the
availability of water and power supply so as to improve real estate development in the county.
On land regulations, this study recommends that the county government should up its game
on land policy so as to make land acquisition, approval, and transfer efficient in order to
promote real estate development. On technical innovations, this study recommends that there
is need for policy making it mandatory for investors to use new technologies and
technological tools to promote effectiveness and efficiency in real estate development.
Description
A Research Project Submitted to the School of Business in Partial Fulfillment of the Requirements for the Award of the Degree of Master of Business Administration Project Management Option) of Kenyatta University