- Title
- Determining the effect of ocean proximity on residential property prices in Port Elizabeth
- Creator
- Hibbers, Vicky
- Subject
- Prices -- South Africa -- Port Elizabeth -- Mathematical models
- Subject
- Real property -- Prices -- South Africa -- Port Elizabeth Real estate management -- Prices -- South Africa -- Port Elizabeth Real property -- Valuation -- South Africa -- Port Elizabeth
- Date Issued
- 2018
- Date
- 2018
- Type
- Thesis
- Type
- Masters
- Type
- MCom
- Identifier
- http://hdl.handle.net/10948/22204
- Identifier
- vital:29874
- Description
- Economic contribution studies, including those from a maritime perspective, are of great interest to both governmental and non-governmental organisations, as well as researchers. This interest stems from the increased pressure on land-based resources, and it is expected that this interest in maritime economics will increase (Hosking, Lee, Kaczynsky, Hosking, du Preez and Haines, 2014). A few studies have been undertaken in order to investigate the ocean’s economic contribution in South Africa (Hosking et al., 2014). However, there are other, often overlooked, benefits that the ocean may bring to localised economies, namely its contribution to residential property markets. Over the last decade, this area of research has received considerable international attention (Rinehart and Pompe, 1994; Rush and Briggink, 2000; Taylor and Smith, 2000; Boarnet and Chalermpong, 2001; Major and Lusht, 2004; Conroy and Milosch, 2009; Scorse, Reynolds and Sackett, 2015). The studies revealed the existence of an ocean premium, which is an additional amount added to the value of a home due to it being located near the ocean. However, from a South African perspective, there is a lack of studies in this area. This study seeks to contribute to the body of knowledge by determining the effect of ocean proximity on property prices in Summerstrand, a suburb in Port Elizabeth. The hedonic price model is applied in this regard. A sample size of 104 properties was used for the study, and the various characteristics of the properties obtained from multiple sources. Most importantly, sales prices were obtained from the South African Property Transfer Guide (SAPTG). As the houses were sold in different time periods, it was necessary to adjust the prices to constant 2016 rands. The ABSA house price index was used for this, in order to account for any inflationary changes over the various periods. The results of the study revealed that proximity to the ocean had a statistically significant positive effect on adjacent residential property prices in Summerstrand, Port Elizabeth. More specifically, proximity to the ocean is valued at between R133.35 and R329.59 per meter closer to the ocean. From a policy perspective, quantifying this coastal premium in Port Elizabeth may encourage the continued conservation of marine resources within Nelson Mandela Bay. Various studies have shown the positive impact conservation has on property prices, resulting in significant premiums being attached to housing prices, even when property characteristics changed (Leeson, 2012; Chamblee, Colwell, Dehring and Depken, 2011). Economic analysis, which includes hedonic pricing, has also had an impact on the evaluation of environmental policies, with Government agencies being the first to fund studies in order to determine the effects of various externalities on housing prices. On the other hand, litigation has had an even more significant impact on policies, due to it being more tangible evidence (Palmquist and Smith, 2001). The manner in which government, and other bodies, assess and measure property values can also be improved upon. Through the separation of housing characteristics, the true value of the property can be determined. This can result in improved accuracy of property tax calculations, and a more accurate value of future developments (Gilbert, 2013). This can help ensure no unnecessary cost expenditure by both government, and property developers, especially considering the volatile nature of the housing market (Gilbert, 2013). The results of this dissertation are subject to two important qualifications. Firstly, the study does not account for the imperfect information that might be present in the market. Secondly, the relatively small sample size could limit the results.
- Format
- vii, 92 leaves
- Format
- Publisher
- Nelson Mandela University
- Publisher
- Faculty of Business and Economics Sciences
- Language
- English
- Rights
- Nelson Mandela University
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