| dc.description.abstract | Real estate has become a major investment globally. Growth in Real estate
industry in terms of sales and prices have been used to predict the real estate demand
and general economic performance. In Kenya, the real estate sector contributes
approximately 9% of GDP despite the declining performance with average uptake
from 23.3% in 2017 to 20.9% in 2018. The decline could be attributed to capping of
interest rates leading to banks reducing funding to the sector, rise in the sector non-
performing loans (NPLs) by 48.0% within the same period, increase in cost of
construction, increased competition amidst falling demand caused as may be
caused by several other macroeconomic factors. This have equally led to loss of jobs,
migration of investors and declined sector performance in general. The relationship
between macroeconomic variable and general performance of real estate have
attracted considerable scholarly analysis and inconsistent results have been reported
across the globe. The effect of macroeconomic factors on financial performance of
real estate in Kenya market have not been adequately addressed. Therefore, this
study evaluated the effect of macro-economic factors on financial performance of
real estate sector in Kenya. Specific objectives were to analyse the effect of interest
rate, inflation rate and exchange rate, on financial performance. The research
research was anchored on the theory of classical interest rate classical inflation rate
and balance of payments theory of exchange. This study used a correlation
research design .The population for this study was real estate sector in Kenya. The study
utilized secondary data collected from Central Bank of Kenya depository KNBS
Economic Survey Reports from 2010 to2020.Datawasanalysed using both
descriptive and inferential statistics. The study found that inflation rates showed a
declining trend with mean rate of 7.02 , insignificant negative weak correlation and
a partial effect of 0.191 insignificant positive change on financial performance; a
declining trend interest rate with a mean rate 10.1, negative weak correlation and a
insignificant partial effect 0.734 negative change on financial performance; and an
upward trend in exchange rate with a mean of 86.30; significant strong positive
correlation and significant partial effect 0.926 positive variation on financial
performance of real estate in Kenya. The study concluded that exchange rate has
significant effect on financial performance of real estate in the Kenyan market, while
inflation rate and interest rate has no significant effect on financial performance of
real estate in the Kenyan market. | en_US |
