Article: A comparative analysis of housing price bubbles in the South African major cities Journal: International Journal of Economic Policy in Emerging Economies (IJEPEE) 2024 Vol.20 No.3/4 pp.265 - 277 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. Inderscience Publishers - linking academia, business and industry through research

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

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

Addresses: School of Accounting, Economics and Finance, University of KwaZulu-Natal, South Africa ' School of Accounting, Economics and Finance, University of KwaZulu-Natal, South Africa ' School of Accounting, Economics and Finance, University of KwaZulu-Natal, South Africa ' School of Accounting, Economics and Finance, University of KwaZulu-Natal, South Africa ' School of Accounting, Economics and Finance, University of KwaZulu-Natal, South Africa ' School of Accounting, Economics and Finance, University of KwaZulu-Natal, South Africa ' School of Accounting, Economics and Finance, University of KwaZulu-Natal, South Africa

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.

Keywords: South Africa; housing market; price bubbles; GSADF.

DOI: 10.1504/IJEPEE.2024.142492

International Journal of Economic Policy in Emerging Economies, 2024 Vol.20 No.3/4, pp.265 - 277

Received: 28 Feb 2022
Accepted: 29 May 2022
Published online: 04 Nov 2024 *

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

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