Document Type Master's Dissertation Author Tyranes, Spiros URN etd-04012010-130011 Document Title An assessment of relationships between key economic indicators and the South African residential property market Degree MBA Department Gordon Institute of Business Science Supervisor
Advisor Name Title Mr M Holland Supervisor Keywords
- real estate business
Date 2007-04-07 Availability unrestricted Abstract
The phenomenal growth of residential property prices when compared to other asset classes has resulted in property prices being the subject of significant debate in South Africa in the recent past. The reasons for the price increases are the subject of as much debate and uncertainty.
This research attempts to determine whether there is a statistically significant relationship between the economic indicators selected and residential property prices, which could provide some indication of the factors influencing residential property prices in South Africa.
The economic indicators selected were interest rates, real gross domestic product, average income, bond affordability levels, rand to US dollar exchange rates and inflation. Residential property prices in South Africa were measured using two data bases, the ABSA database, which comprised average residential property prices split into affordable, middle and luxury segments, as well as the Standard Bank database comprising median residential property prices in South Africa.
The sample period was determined by reference to the period when data in respect of all the variables was available. Autocorrelation was removed from the data and thereafter a stepwise regression was performed to determine which economic indicators had a statistically significant relationship to each category of residential property price.
It was found that quarterly lagged disposable income per capita (average income) had a statistically significant relationship to affordable and luxury property segments, as well as the median property prices. No economic indicator was found to have a statistically significant relationship to middle segment property prices.
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Please cite as follows:
Tyranes, S 2006, An assessment of relationships between key economic indicators and the South African residential property market, MBA dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-04012010-130011/ >
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