| dc.description.abstract | The UN-Habitat (2011) noted that real estate development in most emerging economies
in Africa face a dilemma following the inability to adequately finance urban shelter,
amidst a dire need and ever-increasing demand for housing. Mortgage loans and real
estate financing is very important in housing investment as in most cases it is the key for
making a transaction feasible and profitable. According to Marcum, & Goddard (2012),
the real estate sector experienced a great expansion in the years 2002 to 2007 due to low
cost of mortgage finance worldwide, which encouraged home ownership. According to
UN-Habitat (2009), home ownership has become a significant measurement of economic
health in USA and Australia with almost 63% and 45% of home owners acquiring their
homes through mortgages respectively. The situation in Nairobi is no different from that
of African emerging economies. Little information is available concerning the role of
mortgage in housing development in Nairobi, whilst at the same time the availability and
access to mortgage finance is limited. It is against this background that this study
undertakes to determine the effect of mortgage finance on development of the real estate
sector in Nairobi County. The interest of this research is to establish opportunities for
growth in housing in Nairobi through the availability and access to mortgage finance.
The study was conducted as a descriptive survey. The target population consisted of 33
licensed mortgage lenders in Kenya. However, data available was for 25 mortgage
lenders which were sampled through the CBK where aggregate values of mortgage were
obtained for the period 2008 to 2012. Collection of data was done by way of in-depth
document analysis guide. The researcher edited and coded the data into the SPSS. Both
descriptive and inferential statistics were used to analyze the data. In descriptive
statistics, the researcher used mean and standard deviation; while in inferential statistics
multivariate regression analysis was used to determine the relationship between variables.
The study found that the average of house units for the 25 sampled mortgage companies
as extracted from the financial and annual statements indicated an upward increase over
the 5 year period, with the highest being 3,220 in 2012. In addition, the standard
deviation depicts a variation in number of house units build annually. The study also
found that, the averages for annual housing loans allocated by the 25 sampled mortgage
lending companies rose from 5.70 to 5.97. It is also evident that the sampled mortgage
lending companies extended almost the same amount of annual housing loans as the
standard deviation is so small (less than 1) depicting minimal variability. The study also
found that, from the annual averages of the 25 mortgage lending companies, it is evident
that annual number of house units built increased with increase in the amount of annual
housing loans allocated. The key finding of the study was that, there is a positive
relationship between annual number of house units build and annual housing loans
allocated. In conclusion therefore, the move by the mortgage lending firms to allocate
more housing loans to real estate developers significantly influences the number of
housing units developed in Nairobi County. | en |
