The purpose of the study was to establish the effect of exchange rate on the performance of the residential property market in Kenya. The study used secondary data that was accumulated using secondary data collection sheet from first quarter of 2005 to fourth quarter of 2018. The study conducted several test statistics and diagnostic tests in order to achieve the most optimal solution. Vector error correction model and auto-regressive distributed lag model were employed to test the hypothesis in the short run and long run respectively. The results found out that exchange rate had a negative effect on performance of residential properties in Kenya in both the short run and positive effect in long run. The study has narrowed down the research gap brought about by the conflicting emprical, theoretical and conceptual literature with regard to the effect of exchange rate on performance of residential property market in Kenya.
Key Words: Exchange Rate, Performance, Residential Property
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