Title: Behavioural factors influencing investment decisions in the Kenyan property market

Authors: Nelson Maina Waweru; Geoffrey Gitau Mwangi; John M. Parkinson

Addresses: School of Administrative Studies, York University, 4700 Keele Street, Toronto, ON, M3J 1P3, Canada ' School of Commerce and Management, Strathmore University, P.O. Box 59857-00200, Nairobi, Kenya ' School of Administrative Studies, York University, 4700 Keele Street, Toronto, ON, M3J 1P3, Canada

Abstract: This study investigates the perceptions of estate agents regarding the decision making behaviour of property investors in Kenya using behavioural finance theories. The study uses a survey questionnaire to collect data targeting all the 155 real estate agents within the Nairobi district who are listed in the Kenya Postal Directory 2010 Nairobi edition. The study establishes that anchoring and representativeness are the major behavioural factors that influence property investment decision making. In addition to the behavioural factors, the price and location of the property are also considered important factors when making property investment decisions. Furthermore, the results indicate that property price changes and property market information have a very high impact on property investment decisions. Most investors search for property information through previous experience and through real estate firms.

Keywords: behavioural finance; property market; estate agents; property investors; Kenya; investment decisions; property location; property prices; market information; property information.

DOI: 10.1504/AAJFA.2014.059500

Afro-Asian Journal of Finance and Accounting, 2014 Vol.4 No.1, pp.26 - 49

Received: 28 Sep 2012
Accepted: 29 Apr 2013
Published online: 30 May 2014 *

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