The Influence of Macro Economic Factors on Mortgage Market Growth in Kenya

Ariemba Jared Mogaka; Kiweu Josephat Mboya; Riro George Kamau

doi:doi:10.11648/j.jfa.20150304.13

| Peer-Reviewed

The Influence of Macro Economic Factors on Mortgage Market Growth in Kenya

Ariemba Jared Mogaka, Kiweu Josephat Mboya, Riro George Kamau

Published in Journal of Finance and Accounting (Volume 3, Issue 4)

Received: 28 May 2015 Accepted: 6 June 2015 Published: 25 June 2015

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

Abstract

This study examines the influence of macro-economic variables on the growth of the mortgage market in Kenya. Panel data is collected for a 30 year period, from 1984 to 2013 on the outstanding Real Estate Loan Portfolio as the dependent variable and the macro-economic variables of Average Yearly Inflation Rate, Average Yearly GDP growth Rate, Average Yearly Exchange Rate, Percentage Informal Sector Employment, Treasury bill rate and National Savings Rate as the predictor variables. Regression Analysis was used and the study found no evidence of significant influence of inflation, average GDP growth rate, Treasury bill rate and national savings rate on total real estate loan portfolio. However, the study finds evidence of relationship between informal sector employment, the per capita income and exchange rate. However, the model showed that 81% of the variation in the dependent variable could be explained by the predictor variables.

Published in	Journal of Finance and Accounting (Volume 3, Issue 4)
DOI	10.11648/j.jfa.20150304.13
Page(s)	77-85
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Real Estate, Mortgage Market, Macro-Economic Factors

References

[1]	Akinwunmi, A. (2009). An Investigation into Factors Affecting Mortgage credit Supply in Emerging Economies: A Case Study of Nigeria. PhD thesis, University of Wolverhampton.
[2]	Arcelus, F. & Meltzer, A. H. (1973b).The Markets for Housing and Housing Services: Reply. Journal of Money, Credit and Banking, 5(4): 973-978.
[3]	Bandyopadhyay, A. and Saha, A. (2009).Factors driving Demand and Default Risk in Residential Housing Loans: Indian Evidence. MPRA Paper No. 14352.
[4]	Beck, T., Maimbo, S. M., Faye, I., & Triki, T. (2011). Financing Africa: through the crisis and beyond. World Bank Publications.
[5]	Boamah N.A. (2009). “Secondary Mortgage Market (SMM): Is it Right for Financing Housing in Ghana?”.Journal of Science and Technology, Vol.29, No. 1.
[6]	Boleat, M. (2003).Regulation of Mortgage Lending Institutions. Housing and Finance International, 18(1), 3.
[7]	Butler, S., Kravova, M. & Safavian, M. (2009). Mortgage registration and foreclosure around the globe: Evidence from 42 Countries. Mortgage credit International, June (2009), pp.19-29.
[8]	CBK. (2010). Mortgage Finance in Kenya: Survey analysis.
[9]	CBK. (2012). Developments in the Kenyan Banking Sector for the Quarter Ended 30th June 2012.
[10]	CBK. (2013). Banking Sector Developments Report
[11]	Chiquier, L., Hassler, O and Lea, M. (2004) Mortgage Securities in Emerging Markets. The World Bank.
[12]	Coakes, S. J., Steed, L., and Price, J. (2008). SPSS Version 15.0 for Windows: Analysis without Anguish. John Wiley & Sons Australia Ltd.
[13]	Demir, H., Kurt, V. and Çagdas, V., (2003) “Housing Finance in Turkey” 2nd FIG Regional Conference, Marrakesh, Morrocco, 2-5 December 2003.
[14]	Femi, P.J., (2013). Developing the Mortgage Sector in Nigeria through the provision of Long-term Finance: An efficiency perspective. Cranfield University, DBA Thesis
[15]	Fisher, E. M. (1933). Housing Problems. The Quarterly Journal of Economics, 48(1): 129-149. The MIT Press.
[16]	Gelfand, J. E. (1970). Mortgage Credit and Lower-Middle Income Housing Demand. Land Economics, 46(2): 163-170. Published by: University of Wisconsin Press.
[17]	Green, R. K. and Wachter, S. M. (2005).The American Mortgage in Historical and International Context. The Journal of Economic Perspectives, 19(4): 93-114.
[18]	R. Glenn Hubbard and Christopher J. Mayer (2009). The Mortgage Market Meltdown and House Prices, The B.E. Journal of Economic Analysis & Policy: Vol. 9: Iss. 3
[19]	Huybens, E. and Smith, B. (1998) Financial market frictions, monetary policy, and capital accumulation in a small open economy, Journal of Economic Theory, 81, pp. 353–400.
[20]	IDB (2005) Unlocking Credit: The Quest for Deep and Stable Bank Lending. The Johns Hopkins University Press Washington, D.C.
[21]	Jaffe, D. M, and Renaud, B. (1996).Strategies to develop markets in transition economies. World Bank Policy Research Working Paper 1697.
[22]	Levine, R. (1997). Financial development and economic growth. Views and agenda of Economic Literature, 35 (2), 688-726.
[23]	Lwali, K. (2008). Challenges of International Housing Finance Institutions; a case of Shelter Afrique. Unpublished MBA project University Of Nairobi.
[24]	Mugambe, P. (2009). Access to Mortgage credit by Urban Middle-low Income Salary Earners in Kampala City, Uganda, Masters Thesis, Erasmus University.
[25]	Quigley, J. M. and Raphael, S. (2004). “Is Housing Unaffordable? Why Isn't It More Affordable?” The Journal of Economic Perspectives, 18(1); 191-214.
[26]	Saleh, I. (1999) “Housing Market Dynamics in the Metropolitan Area: A Case Study of the Informal Housing Markets in the Metropolitan Jabotabek, Indonesia,” University of Pennsylvania, Electronic Dissertations. http://repository.upenn.edu/dissertationsaccessed on 17th July 2014
[27]	The World Bank.(2012) Financial Sector Assessment Program Development Module Mongolia Housing Finance Technical Note.
[28]	Walley, S., Badev, A., Beck, T., and Vado, L. (2013) Housing Finance across Countries: New Data and Analysis. http://ssrn.com/abstract=2336126.accessed on 20th April 2014
[29]	Warnock, V. C. & Warnock, F. E. (2008).Markets and Housing Finance. Journal of Housing Economics, Vol. 17, No. 3, pp. 239-251. Washington, D.C.
[30]	Wichura, M.J. (2006). The coordinate-free approach to linear models; Cambridge Series in Statistical and Probabilistic Mathematics. Cambridge: Cambridge University Press.
[31]	Wilcox, R. (2005). Introduction to robust estimation and hypothesis testing. Academic Press.

Cite This Article

Plain Text BibTeX RIS

APA Style

Ariemba Jared Mogaka, Kiweu Josephat Mboya, Riro George Kamau. (2015). The Influence of Macro Economic Factors on Mortgage Market Growth in Kenya. Journal of Finance and Accounting, 3(4), 77-85. https://doi.org/10.11648/j.jfa.20150304.13

Copy | Download

ACS Style

Ariemba Jared Mogaka; Kiweu Josephat Mboya; Riro George Kamau. The Influence of Macro Economic Factors on Mortgage Market Growth in Kenya. J. Finance Account. 2015, 3(4), 77-85. doi: 10.11648/j.jfa.20150304.13

Copy | Download

AMA Style

Ariemba Jared Mogaka, Kiweu Josephat Mboya, Riro George Kamau. The Influence of Macro Economic Factors on Mortgage Market Growth in Kenya. J Finance Account. 2015;3(4):77-85. doi: 10.11648/j.jfa.20150304.13

Copy | Download

@article{10.11648/j.jfa.20150304.13,
  author = {Ariemba Jared Mogaka and Kiweu Josephat Mboya and Riro George Kamau},
  title = {The Influence of Macro Economic Factors on Mortgage Market Growth in Kenya},
  journal = {Journal of Finance and Accounting},
  volume = {3},
  number = {4},
  pages = {77-85},
  doi = {10.11648/j.jfa.20150304.13},
  url = {https://doi.org/10.11648/j.jfa.20150304.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20150304.13},
  abstract = {This study examines the influence of macro-economic variables on the growth of the mortgage market in Kenya. Panel data is collected for a 30 year period, from 1984 to 2013 on the outstanding Real Estate Loan Portfolio as the dependent variable and the macro-economic variables of Average Yearly Inflation Rate, Average Yearly GDP growth Rate, Average Yearly Exchange Rate, Percentage Informal Sector Employment, Treasury bill rate and National Savings Rate as the predictor variables. Regression Analysis was used and the study found no evidence of significant influence of inflation, average GDP growth rate, Treasury bill rate and national savings rate on total real estate loan portfolio. However, the study finds evidence of relationship between informal sector employment, the per capita income and exchange rate. However, the model showed that 81% of the variation in the dependent variable could be explained by the predictor variables.},
 year = {2015}
}

Copy | Download

TY  - JOUR
T1  - The Influence of Macro Economic Factors on Mortgage Market Growth in Kenya
AU  - Ariemba Jared Mogaka
AU  - Kiweu Josephat Mboya
AU  - Riro George Kamau
Y1  - 2015/06/25
PY  - 2015
N1  - https://doi.org/10.11648/j.jfa.20150304.13
DO  - 10.11648/j.jfa.20150304.13
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 77
EP  - 85
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20150304.13
AB  - This study examines the influence of macro-economic variables on the growth of the mortgage market in Kenya. Panel data is collected for a 30 year period, from 1984 to 2013 on the outstanding Real Estate Loan Portfolio as the dependent variable and the macro-economic variables of Average Yearly Inflation Rate, Average Yearly GDP growth Rate, Average Yearly Exchange Rate, Percentage Informal Sector Employment, Treasury bill rate and National Savings Rate as the predictor variables. Regression Analysis was used and the study found no evidence of significant influence of inflation, average GDP growth rate, Treasury bill rate and national savings rate on total real estate loan portfolio. However, the study finds evidence of relationship between informal sector employment, the per capita income and exchange rate. However, the model showed that 81% of the variation in the dependent variable could be explained by the predictor variables.
VL  - 3
IS  - 4
ER  -

Copy | Download

Author Information

Ariemba Jared Mogaka

School of Business and Economics, South Eastern Kenya University, Kitui, Kenya
Kiweu Josephat Mboya

School of Management and Commerce, Strathmore University, Nairobi, Kenya
Riro George Kamau

School of Business Management and Economics, Dedan Kimathi University of Technology, Nyeri, Kenya

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

Ariemba Jared Mogaka, Kiweu Josephat Mboya, Riro George Kamau. (2015). The Influence of Macro Economic Factors on Mortgage Market Growth in Kenya. Journal of Finance and Accounting, 3(4), 77-85. https://doi.org/10.11648/j.jfa.20150304.13

Copy | Download

ACS Style

Ariemba Jared Mogaka; Kiweu Josephat Mboya; Riro George Kamau. The Influence of Macro Economic Factors on Mortgage Market Growth in Kenya. J. Finance Account. 2015, 3(4), 77-85. doi: 10.11648/j.jfa.20150304.13

Copy | Download

AMA Style

Ariemba Jared Mogaka, Kiweu Josephat Mboya, Riro George Kamau. The Influence of Macro Economic Factors on Mortgage Market Growth in Kenya. J Finance Account. 2015;3(4):77-85. doi: 10.11648/j.jfa.20150304.13

Copy | Download

@article{10.11648/j.jfa.20150304.13,
  author = {Ariemba Jared Mogaka and Kiweu Josephat Mboya and Riro George Kamau},
  title = {The Influence of Macro Economic Factors on Mortgage Market Growth in Kenya},
  journal = {Journal of Finance and Accounting},
  volume = {3},
  number = {4},
  pages = {77-85},
  doi = {10.11648/j.jfa.20150304.13},
  url = {https://doi.org/10.11648/j.jfa.20150304.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20150304.13},
  abstract = {This study examines the influence of macro-economic variables on the growth of the mortgage market in Kenya. Panel data is collected for a 30 year period, from 1984 to 2013 on the outstanding Real Estate Loan Portfolio as the dependent variable and the macro-economic variables of Average Yearly Inflation Rate, Average Yearly GDP growth Rate, Average Yearly Exchange Rate, Percentage Informal Sector Employment, Treasury bill rate and National Savings Rate as the predictor variables. Regression Analysis was used and the study found no evidence of significant influence of inflation, average GDP growth rate, Treasury bill rate and national savings rate on total real estate loan portfolio. However, the study finds evidence of relationship between informal sector employment, the per capita income and exchange rate. However, the model showed that 81% of the variation in the dependent variable could be explained by the predictor variables.},
 year = {2015}
}

Copy | Download

TY  - JOUR
T1  - The Influence of Macro Economic Factors on Mortgage Market Growth in Kenya
AU  - Ariemba Jared Mogaka
AU  - Kiweu Josephat Mboya
AU  - Riro George Kamau
Y1  - 2015/06/25
PY  - 2015
N1  - https://doi.org/10.11648/j.jfa.20150304.13
DO  - 10.11648/j.jfa.20150304.13
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 77
EP  - 85
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20150304.13
AB  - This study examines the influence of macro-economic variables on the growth of the mortgage market in Kenya. Panel data is collected for a 30 year period, from 1984 to 2013 on the outstanding Real Estate Loan Portfolio as the dependent variable and the macro-economic variables of Average Yearly Inflation Rate, Average Yearly GDP growth Rate, Average Yearly Exchange Rate, Percentage Informal Sector Employment, Treasury bill rate and National Savings Rate as the predictor variables. Regression Analysis was used and the study found no evidence of significant influence of inflation, average GDP growth rate, Treasury bill rate and national savings rate on total real estate loan portfolio. However, the study finds evidence of relationship between informal sector employment, the per capita income and exchange rate. However, the model showed that 81% of the variation in the dependent variable could be explained by the predictor variables.
VL  - 3
IS  - 4
ER  -

Copy | Download