South African house-price dynamics
type: CreativeWork
description: Motivated by concerns that a speculative price bubble may have formed in the South African house market, this paper examines South African house-price dynamics over a three-decade period spanning 1976 to 2005. Estimation of error-correction models reveals that real changes in the prices of medium- and large-sized South African homes are associated with short-run changes in economic growth, real mortgage rates and sovereign risk. Empirical analysis suggests that the real prices of small-sized homes are not associated with real mortgage rates in the short run. Estimation of the house-price models also revealed that property prices exhibit mean reversion in the long run, although adjustment to long-run equilibrium (governed by economic growth, real mortgage rates and sovereign risk) is slow.
abstract: Motivated by concerns that a speculative price bubble may have formed in the South African house market, this paper examines South African house-price dynamics over a three-decade period spanning 1976 to 2005. Estimation of error-correction models reveals that real changes in the prices of medium- and large-sized South African homes are associated with short-run changes in economic growth, real mortgage rates and sovereign risk. Empirical analysis suggests that the real prices of small-sized homes are not associated with real mortgage rates in the short run. Estimation of the house-price models also revealed that property prices exhibit mean reversion in the long run, although adjustment to long-run equilibrium (governed by economic growth, real mortgage rates and sovereign risk) is slow.
author: Hutchings, Bradley
language: eng
date published: 2007
date modified: 2026-07-22T22:23:12Z
provider: University of Cape Town
publisher: Networked Digital Library of Theses and Dissertations
type: WebPage
source organization: School of Economics

PropertyValue
property ID: Handle
value: http://hdl.handle.net/11427/5799