Factors Influencing The Price Of Land In Nakuru County

Abstract

The objective of the study was to find out the factors influencing land prices in Nakuru County. This was prompted by the recent upsurge of land prices in the country and the researcher was particularly interested in Nakuru County. The real estate sector experiences a series of booms and busts and it was therefore important to find out what is causing them. The study aimed to cover several research gaps among them; whether the variables that influence land value in mature markets like Japan are the same in Kenya, and apart from the variables covered by local studies whether other variables like speculative investment demand do influence land prices. The study adopted a descriptive study design and the target population was the land owners in the four wards of Naivasha as shown in the county government of Nakuru records. Sample was obtained using the stratified sampling method to come up with the most representative sample. The dependent variable was the land price while the independent variables were the speculative investment demand, interest rate, proximity to urban center and real GDP. Data was collected from both primary and secondary sources and analyzed using SPSS version 21.0 the model explained only 76.6% of the relationship between the independent variables and the dependent variable. ANOVA analysis showed that the probability of the value of 0.000 which was less than 0.05 which indicated that the regression relationship was highly significant in predicting how speculative investment demand, Interest rates, Proximity to urban center and Real GDP influenced the price of land in Nakuru County. The findings of the study showed that all the four independent variables had a significant positive relationship with land prices. The study was therefore similar to studies done both internationally and locally. The researcher therefore recommends that policy makers in government work on increasing the growth of GDP. Commercial banks should lower the lending interest rate so that people can access cheap loans and thus afford to buy land. Lastly, the government should endeavor to tarmac all feeder roads to increase the value of land.