The determinants of real estate property prices: the case of Kiambu Municipality in Kenya
The study was set to establish the determinants of real estate property prices: the case of Kiambu municipality in Kenya. The study adopted survey design and primary data was collected using questionnaires. The data was analyzed using frequencies, percentage means, and regression and correlation analysis. The study found that most parcels of lands were acquired through purchase and inheritance and further developed mainly through bank loans, mortgage and Sacco loans. Buyers considered the location of the land/house near the tarmac and price when buying land. The demand for the plots was influenced by neighborhood price offer and the fact that so many people would like to buy land in the neighborhood. It was also noted that agents plays a key role in determination of price of real estates in the area, that is, the broker/ agent showed me many other pieces of land/houses, I bought my property through an agent! broker and Real estate agents/brokers ask for more than they should in commissions. The study used regression analysis to find the association between purchasing power of the buyers, location of a real estate property, demand of real estate property, realtors influence on the prices and real estate property prices. Forecasting model was developed of this significant (R2 = 78.9% >70%). All the independent variables were also individually linearly related with the dependent variable thus a model of four predictor variables was used to rate real estate property prices in Kiambu Municipality in Kenya. The study found out that the key determinants of real estate property prices in Kiambu Municipality in Kenya were location of a real estate property and realtors influence on the prices. The study concluded that prices in the real estate market are dictated by a different set of forces unlike other markets where price are determined by forces of demand and supply. From the study it was recommended that further research should look at the determinants of real estate property prices in other parts of the country and a study on comparison between the property prices in urban and rural areas should be carried out.