| dc.description.abstract | Shelter is a vital necessity and comfort for life. Housing significantly impacts health,
community, economy, education, and social equity, influencing overall welfare.
However, like many developing nations, Kenya struggles to provide affordable housing
for it’s citizens. This study aimed to explore factors affecting affordable housing in
Kenya. Specifically, it examined the relationship between economic determinants and
affordable housing, and the moderating effect of inflation on these relationships. Using
a causal research design and Vector Error Correction Model regression analysis, the
study analyzed data from 2010 to 2022. Data on FDI were sourced from the Kenya
National Bureau of Statistics (KNBS) and the Central Bank of Kenya(CBK),and both
remittance and Mortgage was obtained from the CBK. The Affordable housing and
inflation data was sourced from the National Treasury,Ministry of Housing and
development, KNBS, and the Kenya Bankers Association. Qualitative data was
summarized using tables and figures. A pre-estimation test was conducted to validate
the findings, with the Augmented Dicky Fuller (ADF) test confirming that all variables
had a unit root at the level, while they were stationary at the second difference. Variance
inflation factor (VIF) values were below 10, indicating no multicollinearity. The
Jarque-Bera test result of 0.072994 (greater than 0.05) confirmed that the data were
normally distributed throughout the study period. Descriptive statistics illustrated the
sample's general characteristics. Correlation analysis revealed a moderate negative
relationship between Economic Determinants and inflation on the Affordable Housing
(-0.484778, -0.585630, and -0.280741, respectively), while there was a positive
correlation between remittances and the Affordable Houing (0.613619). The Johansen
test for cointegration identified two cointegrating equations. Model regression
estimates were (5.407022, p < 0.05), (-0.215188, p < 0.05), and (-0.383195, p < 0.05) for foreign direct investment, remittances, and mortgage interest rates which are
generally referred to as economic determinants in this study.The results also indicated
a significant negative moderating effect of inflation on the relationships between
foreign direct investment, remittances, and mortgage with the Affordable Housing in
Kenya (0.814135, p < 0.0000), representing a 13.13% decline when inflation was
included as a moderator. The Kenyan government should implement specific initiatives
or incentives to promote affordable housing, and remittances should be included in
future discussions beyond 2025. | en_US |
