Behavioural factors influencing investment decisions in the Kenyan property market

Abstract

This study investigates the perceptions of estate agents regarding the decision making behaviour of property investors in Kenya using behavioural finance theories. The study uses a survey questionnaire to collect data targeting all the 155 real estate agents within the Nairobi district who are listed in the Kenya Postal Directory 2010 Nairobi edition. The study establishes that anchoring and representativeness are the major behavioural factors that influence property investment decision making. In addition to the behavioural factors, the price and location of the property are also considered important factors when making property investment decisions. Furthermore, the results indicate that property price changes and property market information have a very high impact on property investment decisions. Most investors search for property information through previous experience and through real estate firms.