A Hedonic Approach to Residential Rent Pricing in Kenya

Abstract

Rapid urbanization has posed housing challenges in terms of affordable housing. The government and private sector are keen on this market albeit from a social and business standpoint, respectively. Physical characteristics, locational attributes, household characteristics and macro variables such as population may affect rent price. This paper seeks to provide empirical evidence of rent pricing in the Kenyan market using hedonic model. This is motivated by lack of an official rent index in Kenya and limited research in this area. The findings of the paper may be useful to property developers, investors and real estate regulators. It may also guide government in social housing policy and other interventions in the broader housing market.

Keywords: Hedonic model, Rent price