Mortgage Financing and the Sustainable Growth of Real Estate in Nairobi Metropolis, Kenya.

Abstract

Real estate business is an undertaking that has been perceived as a project that needs a lot of capital to initiate. In Kenya, investing in real estate has been a huge venture for the last 10 years as demand for housing continues to rise. This research aimed at establishing the perceived role of financing options on the sustainable growth of real estate in Nairobi Metropolis, Kenya. It is difficult to fund big projects in real estate solely from personal savings. There is need to use other sources of finance such as equity, mortgage, or venture capital. This research paper was guided by four specific objectives; to assess influence of mortgage financing on the sustainable growth of real estate in Nairobi Metropolis; to evaluate the effect of savings financing venture capital financing and equity financing on the growth of real estate in Nairobi Metropolis. Thise study used primary data collected using a structured questionnaire 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. Results showed that the variables addressed explain 93% of the growth of while mortgage financing and equity financing contributed immensely to sustainable growth of the real estate sector in Nairobi Metropolis in Kenya.