Effects Of Macro-Economic Variables On Real Estate Investment In Mombasa County, Kenya
Abstract
The research objective of the study was to investigate the effects of macro-economic
variable on real estate investment in Mombasa County. Descriptive research design
was used. Real estate investment was measured against interest rate, GDP and
inflation rate. The study employed quarterly secondary data. Data for both the
dependent and predictor variables were obtained from the CBK and KNBS websites
for the period spanning between years 2006 to 2015. To achieve the objectives of the
study, regression analysis was conducted whereby real estate investment was
regressed against the predictor variables: interest rate, GDP, and inflation. The study
established a negative correlation between real estate investment in Mombasa County
and the selected macro-economic variables. The correlation between interest rate and
investment was found to be negative with a value of -0.95 implying that an increase in
interest rate results to a decrease in the real estate investment. Additionally, the
correlation between inflation and investment was found to be negative with a value of
-0.181 implying that an increase in inflation leads to a decrease in real estate
investment. Lastly, the correlation between GDP and investment was found to be
negative with a value of -0.157 implying that an increase in GDP leads to a decrease
in investment. The study concluded that the selected macro-economic variables had
no effect on real estate investment in Mombasa County. This is because the p-value
was found to be 0.469 which is greater than the significant level of 0.05 meaning, the
effect of the selected macro-economic variables on real estate investment in Mombasa
County was insignificant. The study recommends that since the selected macroeconomic
variables were found to cater for a relatively small percentage of the model
variability, it would be prudent to conduct a study to determine the other factors that
influence real estate investment in Mombasa County. In addition, the study
recommends that real estate investment decisions be taken in a broader perspective so
as to incorporate other factors that significantly influence real estate investment in
Mombasa County. Also, with the regional integration, it would be interesting to
replicate this study in other countries in the Great Lakes Region.
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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