Influence of Land as Factor of Production on Growth of Commercial Real Estates in Machakos County
Abstract
There has been a slow growth in the commercial real estates in Kenya as compared to the demand of the houses. Demand for housing units continues to outstrip the supply; property developers in Kenya have in the recent years considerably scaled down their construction activities, pointing to a struggling property sector. In 2018 the real estate sector in Kenya recorded its slowest annual growth in four years, giving weight to property market reports that signaled a slump in demand despite increased supply of new housing units. The purpose of the study was to establish the influence of land as a factors of production on the growth of commercial real estate in Machakos County. The study adopted a cross-sectional survey research design. The target population for this study was made up of 374 registered property developers with Kenya Property Developers Association operating in Machakos County. Census approach was used to study all the 374 registered property developers. Prior to commencement of the actual study, 40 respondents from Kajiado, a neighboring county to Machakos were used in a pilot study to pre-test the research instrument. The researcher triangulated both structured questionnaires and open ended interview guide to gather and saturate data from the respondents. While the interview guides were bent to gather in-depth qualitative data from the real estate agents, the structured questionnaire was used to collect quantitative data from the respondents who develop the real estates. Both quantitative/ numerical data and qualitative/ descriptive data were collected using structured questionnaire and unstructured interview guide respectively. Qualitative data was analyzed using descriptive statistics while quantitative data was analyzed using inferential statistics. Time series was also be utilized in this study. Statistical Packages for Social Sciences (SPSS) software was used for higher statistical computations. The findings revealed that there was a positive and significant relationship between land and growth of commercial real estate in Machakos County. Based on the findings the study concluded that land is an important factor in determining the growth of commercial real estate in Machakos County. The study therefore recommended that before considering investing in commercial real estate in Machakos County, the investors should consider a number of aspects regarding land such as land location, land size, the general appearance of the land, accessibility and the price of the land and most importantly the legitimacy of the land.
Keywords: Land, Growth of Commercial Real estate, Investors, Developers, Machakos County.
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