THE EFFECTS OF TRANSFER DUTY EXEMPTION ON HOUSING DEMAND IN THE THREE METROS IN GAUTENG PROVINCE, SOUTH AFRICA

Koech Cheruiyot

AfRES from African Real Estate Society (AfRES)

Abstract: With housing forming a large part of households’ long-term wealth, the South African government, since January 1950 to date, have extended a rebate to house buyers – both individuals or natural persons and companies or other parties – to enable them to buy houses of their choices. These rebate rates have changed over the years to accommodate the consumer price indices as embodied in the general cost of living and property market rates fluctuations. This paper uses spatial data on house prices from 1993 to 2010 (from Lightstone Pty Ltd) and other economic variables to test the effect of such historical rebates on housing demand in the three metropolitan municipalities (i.e. Johannesburg, Ekurhuleni, and Tshwane) in Gauteng province, South Africa. Despite these metros presenting a dense, developed, bustling, and growing housing market in the country, none of the existing studies have focused on these metros, as one contiguous unit. The research employs a spatial panel data model implemented in R studio software to analyse the data. It is anticipated that the results will buttress the need to more effectively apply transfer duty rebates towards increasing housing demand, and investment in the long-term household wealth, South Africa.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2019-09-01
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Persistent link: https://EconPapers.repec.org/RePEc:afr:wpaper:2019-116

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