Land value as a function of distance from the CBD : the case of the eastern suburbs of Pretoria

Abstract

The greater the benefit derived from using a piece of land for any particular purpose the higher the price the prospective riser is willing to pay. The demand for land is thus a reflection of the utility derived from its use by current or potential users. The ability to compete for sites depends on whether they have the means to benefit from accessibility and complementarity within the urban framework. Conventional theory states that productivity determines urban rent, which is the highest at the place of maximum accessibility, i.e. the central business district (CBD). This paper review selected residential location theories and the factors influencing location decisions. Using selected eastern suburbs of Pretoria, the paper tries to determine whether residential land values decrease as distance from the CBD increase as theory suggests.