AN INVESTIGATIVE STUDY ON THE FACTORS CAUSING PRICE CHANGES OF RESIDENTIAL HOUSES IN NAIROBI OVER THE PERIOD 2008-2012

ABSTRACT
Real estate industry has been recognized globally for taking a vital role in economic, political
and social development. The residential housing sector is very important in any country
because it provide shelter which is one of the basic needs. The overall demand for housing in
Kenya according to UN Habitat survey and Kenya Vision 2030 is 150,000 housing units per
year as compared to 35,000 housing units that are delivered in the market annually. The
supply shortage has left private developers focusing on highest return on the housing market.
The study’s main goal was to determine the factors causing the price changes of residential
houses in Nairobi County over the period 2008-2012. The study population included valuers,
property managers, real estate agents and real estate contractors practicing in Nairobi County.
The sample was selected by stratified random and purposively sampling.
The main findings of the study are that the price changes of residential houses in Nairobi
County have been caused by the ever increased demand of residential houses. It has also been
noted that easy of access to and availability of mortgages has contributed to increased prices
of residential houses in Nairobi County over the last four years. Additionally, improved
performance of the Kenya economy has also contributed to increased prices of residential
houses because of increased pay to public servants. The study identified the ever increasing
price of land and construction cost to have also contributed highly in price changes of
residential houses in the study area. Lastly, the study found that increased prices of residential
houses had contributed to reduction in marketability of the houses.
The study recommends government intervention through the enactment of policies, rules and
regulations to guide on pricing of residential houses so as to maintain affordability to all.
The national government and county government should offer subsidies to the construction
sector by providing finance at subsidized interest to property developers or offer tax waivers
to the buyers.
 

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