Factors Influencing Housing Supply in Nairobi County

Abstract

In this study, we adopted the “Stock-flow’’ model, previously used by Elizabeth Steiner on the Swiss housing market, which is a multivariate linear regression model that uses the OLS method to establish the possible relationships that exist between housing supply and the various independent variables. Using data for a period between 1984 and 2014, significant pre and post-estimation regression tests were done to try and establish the joint relationship between population in Nairobi County, mortgage cost, income per capita, per unit construction cost and the unit price of land as independent variables and the dependent variable which is housing supply in Nairobi County. The results showed that construction costs and mortgage interest rates were negatively correlated to the housing supply, while price of land was found to be positively correlated with the levels of housing supply in Nairobi County.