Abstract:
Real estate business is an undertaking that has been perceived by many as a project that needs a lot of capital to initiate. In Kenya, investing in real estate hasn't been such a huge venture until the last 10 years. This research therefore aimed at establishing the perceived role of mortgage financing on the growth of real estate in Kenya with a focus in Nairobi Metropolitan area. It is often difficult to fund big projects in real estate solely from personal savings. There is a need to use other sources of finance such as equity or self-financing, or mortgage from financial institutions like commercial banks, insurance companies and mortgage institutions or venture capital. This research paper was guided by the objective; To assess influence of mortgage financing option on the growth of real estate in Nairobi Metropolis. This study used primary data collected from registered developers in Kenya with an interest in Nairobi Metropolis. The sample size was 81 out of a population of 100 developers registered with Kenya Property Developers Association. The study employed descriptive research design and data was analyzed through multiple regression analysis. This study found out that the variable only explained 7.1% of the growth of Real estate in Kenya. Other factors outside this research explain 92.9% of the growth in real estate. Due to the low explanation the researcher employed confirmatory factor analysis to determine model perfect of fit. The study found mortgage financing as a variable had a good fit. From this study, then there is a need for more research on those other factors that have spurred growth in real estate in Kenya. This study was carried out during the period May to August 2019.
