Abstract
Housing plays a very important role in the social economic development of any nation. One set of factors that impacts on the funding of the supply-side of housing are economic factors comprising market forces, cost of inputs, the macro economy and the cost of funding. This paper sets to establish the relationship between economic factors and funding of the supply-side of housing in Kenya and also the effect of the major stakeholders on such a relationship if it exists. Using an explanatory form of approach in research design a survey was conducted where primary data was collected by self-administered questionnaires from a random sample of 212 branches in Nairobi of financial institutions drawn from a population of 43 commercial banks, 9 deposit-taking MFIs and three major financiers of housing development. Factor analysis, correlation analysis and ordinal logit regression were used to determine the relationship between funding of housing and economic factors. Results indicated a negative relationship between economic factors and funding of housing development. It was also established that there exists a positive moderating effect of stakeholders on the relationship between economic factors and funding of housing development. The implication being the government and policy makers should ensure that interest rates and inflation rates are kept at a level that will encourage investments in housing, with the government acting then more as an enabler.
Highlights
IntroductionThe role of the construction industry to an economy cannot be underplayed according to (UKCG, 2009) as it is seen as a driver of growth in other sectors due to its heavy reliance on an extended and varied supply chain
Housing contributes to the socio-economic development of nations
The regression analysis results show that there exists a negative relationship between economic factors and funding of housing development and the coefficient was significant at 5 percent
Summary
The role of the construction industry to an economy cannot be underplayed according to (UKCG, 2009) as it is seen as a driver of growth in other sectors due to its heavy reliance on an extended and varied supply chain. According to the Economic Survey (2015), the construction industry in Kenya registered an accelerated growth of 13.1 per cent in 2014 compared to a revised growth of 5.8 per cent in 2013. This is reflected by the increase in both cement consumption by 21.8% and a 15.4% increase in the value of building plans approved by Nairobi City Council
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