Factors Affecting Investment in Real estate in Ethiopia
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Date
2024-06-27
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A.A.U
Abstract
This study aims to investigate the variables influencing real estate investment in Ethiopia. To help investors, clients, and managers make the best possible investment decisions in Ethiopia's real estate market, the researcher offers fundamental information. Five factors were chosen by the researcher with the expectation that they would influence real estate investing. In addition to using time series data from 1996 to 2023, the secondary data utilized for analysis was sourced from the World Bank, the Ethiopian Investment Commission, the National Bank of Ethiopia, and Census reports. Eviews 10 was utilized for a fast and precise data analysis. For the study variables, the Autoregressive Distributed Lag Model (ARDL) and Error Correction Model (ECM) are suggested and used in the research. The findings of the research indicate that there is a statistically positive relation between GDP growth, urban population growth and real estate investment in short term, but not significant in a long-term one. Conversely, in the short term, real estate investment is negatively impacted by inflation and exchange rates, which is significant. The lending interest rate exhibits an insignificant negative impact over the short term, but a positive statistically significant effect in the long term. According to the study's findings, every period, the system will be adjusted to return to equilibrium by 71.68% of its initial deviation. Long-term causal relationships have been demonstrated between real estate investment and GDP growth, interest rates, inflation rates, and exchange rates, as well as urban population growth