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A comparative analysis of housing price bubbles in the South African major cities

Author

Listed:
  • Paul-Francois Muzindutsi
  • Ntuthuko Mbhele
  • Trayum Gopal
  • Namishka Rambaran
  • Thulisile Mthembu
  • Purusha J. Ramjiyavan
  • Fikile Dube

Abstract

This study examined and compared the level of price bubbles across housing markets in six major South African cities. The generalised supremum augmented Dickey-Fuller (GSADF) was used to test for the existence of housing price bubbles in Johannesburg, Tshwane, Durban, Cape Town, Ekurhuleni, and Nelson Mandela Bay cities from 2001 to 2018. The results show that housing price bubbles in the South African cities correspond with the expansion of the credit market and the subsequent increase in the demand for housing preceding the global financial crisis of 2007-2008. We found that Cape Town had the most volatile housing prices, while Nelson Mandela Bay had the lowest volatility. Our findings show that the housing prices tend follow a similar pattern and the bubbles seem to spread across the sampled cities.

Suggested Citation

  • Paul-Francois Muzindutsi & Ntuthuko Mbhele & Trayum Gopal & Namishka Rambaran & Thulisile Mthembu & Purusha J. Ramjiyavan & Fikile Dube, 2024. "A comparative analysis of housing price bubbles in the South African major cities," International Journal of Economic Policy in Emerging Economies, Inderscience Enterprises Ltd, vol. 20(3/4), pages 265-277.
    • Handle: RePEc:ids:ijepee:v:20:y:2024:i:3/4:p:265-277
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