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Exchange Rate and Performance of the Residential Property Market in Kenya

Author

Listed:
  • 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)

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.

Suggested Citation

  • Charles Njoroge & Willy M. Muturi & Oluoch Oluoch, 2019. "Exchange Rate and Performance of the Residential Property Market in Kenya," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 8(3), pages 88-100, July.
    • Handle: RePEc:rbs:ijfbss:v:8:y:2019:i:3:p:88-100
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    References listed on IDEAS

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