The relationship between monetary policy and growth of real estate in Kenya
The study was conducted on the relationship between monetary policy and growth of real estate in Kenya. The objective of this study was to establish the relationship between central bank’s monetary policy and real estate growth in Kenya. The study used a descriptive research design, by examining the relationship between CBR policy and growth in real estate. The data points ranged between January 2004 to December 2013 by taking the monthly data for the research which had 10 data points. Data was analyzed using a multiple regression model was used to analyze the data. The regression results revealed that the relationship between the variables was found to be direct apart from the rate of inflation which showed that there was an in inverse relationship with real estate growth. This is because its p-value=.069 which was more than 5% meaning that the model was statistically insignificant. This study therefore recommends that central bank to design and develop proper measures for to regulate monetary policies to ensure that there exists a proper balance between interest rates and circulation of money in the economy this will create a stable environment for investment in real estate and growth of the economy. A comparative study can be carried out to establish whether investment in real estate in other countries is able to impact the economic development. Thus enabling comparison with the Kenyan experience and provide concrete facts upon which reliable conclusions can be made. The present study can further be investigated over a larger time period say twenty years this could have given the data more validity since it would have been for a wider scope and also could have also generated different results. The sample size should also be increased to get a more representative sample and make better conclusions. The limitation of this study was that the secondary data was collected from KNBS, CBK and World Bank’s World Development Indicators. The limitation of this study was that Central Bank of Kenya works under very strict confidentiality in order to secure any unauthorized access to information pertaining to the study variables. Due to time limit and financial constraints, it was not possible to carry out comprehensive research pertaining to the scope of the study. The study was therefore limited basically to the central Bank of Kenya located in Nairobi Region and not the entire sub-Saharan countries.