Small and Medium Size

Topics: Mortgage, Real estate, Sociology Pages: 24 (7737 words) Published: June 18, 2013
UNIVERSITY OF NAIROBI

The relationship between Social Capital, Mortgage Financing and Performance of Real Estate in Kenya A Case Study of Nairobi

By
MURUNGI ROYFORD KINYUA
B04/37058/2010

A PROJECT PROPOSAL PRESENTED IN PART FULFILLMENT OF THE AWARD OF A BACHELORS DEGREE IN REAL ESTATE AT THE UNIVERSITY OF NAIROBI, DEPARTMENT OF REAL ESTATE AND CONSTRUCTION MANAGEMENT

MAY 2013

ABSTRACT

The purpose of this study is to determine the relationship between Social Capital, Mortgage Financing and Performance of Real Estatein Kenya. This study is guided by the following three research questions: What is the relationship between Social Capital and Mortgage Financing?What is the relationship between Mortgage Financing and Performance of Real Estate?What is the relationship between Social Capital and Performance of Real Estate?

The research design is descriptive in nature focusing on real estate sector in Kenya. Stratified sampling technique will be used to select the sample in which twenty (20) real estate firms and 30 firms real estate property developers; giving a total of 50. From the selected real estate’s firm, managing directors will be randomly selected from each of the firms giving a sample of 50. The staff includes both management and non-management staff categorized into four levels; senior level management, middle level management, supervisory staff and general staff. Information will be collected using a questionnaire developed by the researcher and administered with the help of a trained research assistant.

This study will be of great importance to other researchers and academicians who seek to understand the relationship between Social Capital, Mortgage Financing and Performance of Real Estate in Kenya. The study will also be practical importance to mortgage sector and property development institutions or organizations in Kenya.

Table of Contents
ABSTRACT2
INTRODUCTION5
1.1 Background5
1.2 Statement of Problem6
1.3 Purpose of the Study6
1.4 Research Objectives6
1.5 Research Questions6
1.6 Significance of the Study6
1.7 Scope of the study7
LITERATURE REVIEW8
2.1 Introduction8
2.2 Social Capital8
2.2.1 Overview of Social Capital8
2.2.2 Bridging and Bonding Social capital9
2.2.3 Social Networks10
2.2.4 Importance of social capital10
2.3 Mortgage Financing11
2.3.1 Overview of Mortgage Financing11
2.3.2 Types of Mortgages11
2.3.3 Importance of Mortgage Financing12
2.3.4 Funding Mortgage Loans12
2.4 Mortgage Terms13
2.4.1 Mortgage Repayment13
2.4.2 Mortgage Risks13
2.4.3 Mortgage pricing13
2.4.4 Mortgage insurance14
2.5 Mortgage Interest Rates15
2.6 Performance of Real Estate15
2.6.1 Rental Income15
2.6.2 Return and Risk16
2.7 Relationship between Social Capital and Mortgage Financing16
2.8 Relationship between Mortgage Financing and Performance of Real Estate17
2.9 Relationship between Social Capital and Performance of Real Estate18
RESEARCH METHODOLOGY19
3.0 Introduction19
3.1 Research Design19
3.2 Study Population and Sample Size19
3.3 Sampling Design and Procedure19
3.4 Data Source19
3.5 Data Collection Instruments20
3.6 Measurement of Variables20
3.7 Validity and Reliability of the Instrument20
3.8 Data Analysis21
REFERENCES22
APPENDICES24
APPENDIX I: COVER LETTER24
APPENDIX II: QUESTIONNAIRE25

INTRODUCTION
1.1 Background
The commercial real estate market worldwide is highly dominated by institutional investors. At present challenge to private real estate investments because individual properties are not bought and sold on a regular basis like stocks and bonds (Kohnstamm, 1995). Most of the developed countries use stocks and bonds in financing of real estate but in Kenyait’scompletely different as we use mortgage to finance. Mortgage financing refers to a long term loan secured by collateral of some specified real estate property that the...

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APPENDICES
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