The impact of affordability on house price dynamics in South Africa

dc.contributor.authorBoshoff, Douw Gert Brand
dc.contributor.emaildouw.boshoff@up.ac.zaen_US
dc.date.accessioned2011-03-08T12:55:08Z
dc.date.available2011-03-08T12:55:08Z
dc.date.issued2010
dc.description.abstractLately, the residential property market in South Africa has experienced much turbulence. Some perceived growth as a 'property bubble', while others considered it a healthy investment opportunity. This article considers the fundamental drive behind residential property demand and analyses the recent property cycle compared to the past. It also considers the effects of residential property demand on the construction industry. The study investigates the variables that drive property demand and uses methods of statistical fit of historical macro-economic variables to apply to a South African context and to explain recent residential property activity. Research found that residential property demand and subsequent market prices are to a large extent influenced by affordability, which is indicated by capitalising rent as part of disposable income with the prime lending rate of banks. Gross domestic product, as the main indicator of growth within the country, is the main driver of disposable income for households, and can subsequently be used to foresee growth and its effect on affordability and residential property values. The article provides insight into the spending behaviour of households, and shows how that behaviour flows over into spending on housing, and the subsequent influence on residential property values.en_US
dc.description.abstractDie residensiele eiendomsmark in Suid-Afrika het onlangs baie turbulensies ervaar. Baie het die groei beskou as 'n "eiendoms bubble", terwyl ander dit as 'n goeie beleggingsgeleentheid beskou het. Hierdie studie ondersoek die fundamentele dryfkrag van residensiele eiendomsvraag en analiseer die onlangse eiendomsiklus in vergelyking met die verlede. Die studie ondersoek die veranderlikes wat eiendomsvraag daarstel en gebruik statistiese regressiemetodes om die invloed van makro-ekonomiese veranderlikes op die onlangse residensiele eiendomsmark te bepaal. Navorsing het getoon dat residensiele eiendomsvraag en dienooreenkomstig die markpryse daarvan, grootliks beinvloed word deur bekostigbaarheid, wat aangedui word deur huurbesteding te kapitaliseer deur die prima rentekoers van banke. Bruto binnelandse produk, wat as die vernaamste aanwyser van groei in die land beskou word, is die vernaamste dryfkrag agter besteebare inkomste, en kan gebruik word vir vooruitskattings op groei en die gevolg daarvan op bekostigbaarheid en residensiele eiendomswaardes. Die studie verskaf insig in die bestedingspatrone van huishoudings, en dui aan hoe die algemene besteding ook die besteding op behuising en gevolglik huispryse beinvloed.af
dc.identifier.citationBoshoff, DGB 2010, 'The impact of affordability on house price dynamics in South Africa', Acta Structilia : Journal for the Physical and Development Sciences, vol. 17, no. 2, pp. 126-148. [http://www.uovs.ac.za/faculties/content.php?id=5174&FCode=04&DCode=115]en_US
dc.identifier.issn1023-0564
dc.identifier.urihttp://hdl.handle.net/2263/16012
dc.language.isoenen_US
dc.publisherThe Physical Development Sciences, University of the Free Stateen_US
dc.rightsThe Physical Development Sciences, University of the Free Stateen_US
dc.subjectResidential property demanden_US
dc.subjectResidential property valuesen_US
dc.subjectMacro-economic property variablesen_US
dc.subjectReal house pricesen_US
dc.subjectResidensiele eiendomsvraagaf
dc.subjectResidensiele eiendomswaardesaf
dc.subjectMakro-ekonomiese eiendomsveranderlikesaf
dc.subjectReele eiendomspryseaf
dc.subject.lcshHousing -- Prices -- South Africaen
dc.subject.lcshHousing development -- South Africaen
dc.subject.lcshHousing policy -- South Africaen
dc.subject.lcshResidential real estate -- South Africaen
dc.subject.lcshReal property -- Ownership -- South Africaen
dc.titleThe impact of affordability on house price dynamics in South Africaen_US
dc.typeArticleen_US

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