| dc.description.abstract | This study examines the impact of selected macroeconomic variables on the performance of residential housing properties in Kenya using quarterly data from 2000 Q1 to 2010 Q4. Prices of newly constructed residential houses are analyzed against gross domestic product, domestic interest rates, inflation, Kenya shilling US dollar exchange rate, rental income, money supply and public debt. Multiple linear regression model is used to determine causation and relationships.
To achieve the objective of the study, secondary data on the selected macroeconomic variables was collected and analysed using house prices as the dependent variable. Three main issues were empirically tested to determine any linkages between the selected variables and housing property markets in Kenya. Firstly, the study dealt with the determination of any relationship between the selected variables and property returns in Kenya. Secondly, the study examined to what extent changes in the selected variables affected house prices. Thirdly, the study examined what proportion of changes in house prices have been caused by changes in the selected macroeconomic variables within the study period.
The results reveal that the performance of the housing sector in Kenya is influenced significantly by changes in macroeconomic variables used in this study. Specifically changes in gross domestic product, money supply and public debt positively impact on the house price returns whereas changes in domestic interest rates, Kenya shilling US dollar exchange rate, inflation, and rental income negatively affect house price returns. | en_US |
