Factors Affecting Housing Supply in Nairobi County, Kenya

In developed countries, one of the most important factors affecting housing supply is financing costs. However, in her study of housing supply in Kenya, P. Wanjira Chege finds that formal bank-based financing costs do not have a strong effect on housing supply in developing economies such as Kenya, because many developers use alternative sources of capital that include gains from corruption. With the rapid rural-to-urban migration, Nairobi is experiencing a steep rise in the demand for housing. There is a demand for 200,000 units against a supply of only 30,000 to 40,000 units annually. In this study, P. Wanjira Chege looks at the factors that affect housing supply in Nairobi County. Her study focus is construction costs, financing costs and inflation rates. The target population is the residential housing market of Nairobi from 1970 to 2016. A descriptive research design that involves a quantitative approach is employed in the methodology. The results of this study indicate thatthere is a negative relationship between construction costs, financing costs and housing supply and a positive relationship between inflation rate and housing supply in Nairobi County, Kenya.