FACTORS AFFECTING REAL ESTATE BUSINESS PERFORMANCE IN ADDIS ABABA.

Abstract

The research was done with an objective of determining the influence of selected determinant factors particularly - Construction time, material availability and price escalation, foreign exchange rate, housing finance and land availability- on the performance of real estate businesses in Addis Ababa. As per the finding of the research majority of the real estate firms are impacted by construction material shortage while price escalation has negative impact on the performance of the firms. The research is also found foreign exchange rate has negative impact on performance of the real estate firms and real estate firms need to work on possible solution to minimize the need for foreign exchange rate such as; planning ahead on optional material sourcing and assessing risks associated with foreign exchange rates fluctuations and make proper mitigation plan. Housing finance has a strong impact on performance which implied real estate firms need to see and use of multiple financing options available and work on their market focus as majority of them focus only on middle- and higher-income classes and they need to look in to ways on how they can provide variety of project/ based on financial ability of home buyers which on the other hand means improving financial capacity & performance. Additionally, land availability and performance of real estate firms have direct relationship. It was also found that most the real estate firms don't complete the building of homes within the intended time, however, the result found showed construction time does not impact the performance of the real estate firms. The researcher concluded that the reason for this may be the imbalance between the demand and supply of housing,