FIXED COSTS AND THE DEVELOPMENT OF REAL ESTATE IN MOMBASA COUNTY, KENYA

Abstract

Purpose: The main purpose of this study was to examine how fixed costs affect developments of real estate in Mombasa County, Kenya.

Methodology: The study adopted the explanatory research design. The target population was the real estate developing firms in Mombasa County Kenya. According to Kenya Statistical Abstracts Issues, there are 25 Property development companies in Mombasa County, Kenya. Sample size comprised of 25 finance managers and 25 marketing managers from the real estate development firms. The study used questionnaires to collect the required data. Descriptive statistics was used mainly to summarize the data. SPSS was used for analysing complex data. The descriptive analysis involved the use cross tabulation and frequency distribution tables. Regression analysis was used to establish the relationship between the independent and dependent variables.

Results: The study findings revealed that there was a positive association between financing costs, legal costs, labour costs and administrative costs and the development of real estate in Mombasa County. The study results finally indicate that only labor cost had a significant influence on the development of real estate

Policy recommendation: The study recommends that there is a need for the government to come up with policies that will reduce the cost of labour in real estate; this will help in improving the development of real estate generally and attractive to investors