Effect of Prospect Factors on Real Estate Investment in Embu County, Kenya

Abstract

Investment has always been deemed as a deliberate and rational process. However, there exists a controversy if indeed this is true. This study aimed at assessing the influence of prospects factors on real estate investment in Embu County. The study was guided by Prospect Theory. The target population of the study was 126 registered real estate investors in Embu County. The study adopted a descriptive research design where a census of 126 investors from Embu town, Runyenjes and Siakago Urban centers was undertaken. Primary data was collected through semi structured questionnaire that was self-administered to respondents in the selected three areas of interest. A total of 118 questionnaires were returned giving a response rate of 93.7%. Statistical package was used to undertake descriptive and inferential statistical analysis. Descriptive analysis was done using both means and standard deviations. A test of multicollinearity was done using a numerical Variance Inflation Factors and Tolerance. Bivariate linear regressions were used to assess the influence of prospect factors on real estate investment. Model R2 , ANOVA Statistics (F Statistic and associated p-value) and regression coefficients (Beta and associated p-value) were generated and interpreted. The Bivariate results indicated that prospects factors explain approximately 26.7% of real estate investment decisions. Based on the finding using p value to test significance, prospects factors had positive and statistically significant effect on real estate investment decisions. This study concludes that real estate investors in Embu County sometimes do not make investment decisions rationally but are influenced by prospect biased decisions. Therefore, this study recommends that investors should put into consideration the future prospect of the real estate before they make decision of either to buy or sell