Exchange Rate and Performance of the Residential Property Market in Kenya

Charles Njoroge, Willy M. Muturi and Oluoch Oluoch
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Charles Njoroge: School of Business, Jomo Kenyatta University of Agriculture and Technology
Willy M. Muturi: School of Business, Jomo Kenyatta University of Agriculture and Technology
Oluoch Oluoch: School of Business, Jomo Kenyatta University of Agriculture and Technology

International Journal of Finance & Banking Studies, 2019, vol. 8, issue 3, 88-100

Abstract: The purpose of the study is to establish the effect of exchange rate on the performance of the residential property market in Kenya. The study used secondary data that was accumulated using secondary data collection sheet from first quarter of 2005 to fourth quarter of 2018. The study carried out several test statistics and diagnostic tests in order to achieve the most optimal solution. Vector error correction model and auto-regressive distributed lag model were employed to test the hypothesis in the short run and long run respectively. Interestingly, the study results found that exchange rate had a negative effect on performance of residential properties in Kenya in the short run while a positive effect was observed in long run. The study findings narrowed down the research gap brought about by the conflicting empirical literature though there is room for further analysis on the reasons behind this difference between short run and long run relationship of the two markets.

Keywords: Exchange Rate; Performance; Residential Property (search for similar items in EconPapers)
Date: 2019
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