Diversity and value in Africa's real estate

Ramabodu, Molusiwa Stephan; Kotze, B.G.; Verster, J.J.P.

doi:10.1108/14635780710720144

Cited by 9 publications

(4 citation statements)

References 2 publications

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“…According to Mooya (2010) the lack of economic growth together with high unemployment and unequal income distribution in South Africa, are major barriers to growth in the property sector. In a prior study Ramabodu et al (2007) argues that South Africa has a unique property industry given the country's high level of diversity and cultural differences. These factors needs to be acknowledged in analysing property investment decision making in South Africa.…”

Section: A Background On the South African Property Fund Marketmentioning

confidence: 99%

Heuristic-driven bias in property investment decision-making in South Africa

Lowies

Hall

Cloete

2016

Journal of Property Investment &Amp; Finance

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Purpose – The purpose of this paper is to determine whether anchoring and adjustment as heuristic-driven bias and herding behaviour influences listed property fund managers in South Africa’s property investment decisions. The study contributes to the understanding of the influence of heuristic-driven bias and herding behaviour on property investment decisions made in a highly volatile environment. Design/methodology/approach – This study is focused on the subject field of behavioural finance and follows a survey-based design. A questionnaire was finalised after completion of the pilot study and was sent via e-mail to fund managers of all South African-based property funds listed on the Johannesburg Securities Exchange. Non-parametric statistical measures were used. Findings – Consistency with other studies suggests that anchoring and adjustment may exist in the decisions made by listed property fund managers. However, fund managers tend to not adjust to new information due to the current socio-political environment in South Africa rather than a lack of understanding of the new information. Practical implications – It is recommended that investors form developed and emerging economies take notice of the highly volatile circumstances in which property fund managers in an emerging economy such as South Africa have to make investment decisions. The probability of missed gains as a result of conservative investment strategies may have an impact on future returns. Originality/value – This study enhanced the understanding of the role that heuristic-driven bias plays in the South African property industry and more importantly, it went some way towards enhancing understanding of behavioural aspects and their influence on property investment decision making in an emerging market.

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Section: A Background On the South African Property Fund Marketmentioning

confidence: 99%

Heuristic-driven bias in property investment decision-making in South Africa

Lowies

Hall

Cloete

2016

Journal of Property Investment &Amp; Finance

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“…Land use decisions are sometimes made by local governments, which have influential impacts on activity-friendly community environments. Further, government support that enforces constitutionally-driven community participatory model of development planning at the grassroots level is important [36], [37].…”

Section: Governancementioning

confidence: 99%

“…Economic uncertainty affects interest rates and monetary policy (lower-for longer) benefits real estate over other asset classes [5]. Economic conditions such as recession, unemployment rates and gross domestic product rates, as well as fiscal policies and regulations including interest rates and mortgage/lending environment, influence the rate at which investors and developers want to enter the real estate market [37], [38].…”

Section: Economic Factorsmentioning

confidence: 99%

Towards Sustainability of Real Estate Development: An Integrative Review of Smart City Planning Considerations

Okoro¹,

Andre²,

Marno³

2020

Proceedings of the Creative Construction E-Conference 2020

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With the ever-increasing urban sprawl in African cities, more attention should be paid to the provision of real estate infrastructure to cater for the population. Ways to harness Africa's possibilities and leverage the opportunities available in the fourth industrial revolution, to diminish housing infrastructure backlogs, warrant consideration. The current study therefore aims to identify the factors that influence the sustainability of real estate developments in recent times, with attention to the planning considerations. An integrative review was conducted with literature from databases including Scopus, Google, Google Scholar, Publish or Perish, Academic Search Complete and Emerald. Synthesis was undertaken using thematic content analysis to identify themes on the factors influencing real estate developments and its sustainability. The distillation of literature revealed that institutional and economic factors were considered the most important factors, while developer's attitude and socio-cultural factors were the least occurring among the sampled literature. By establishing these factors, the current study provides important information for housing and construction stakeholders to be informed and guided in the planning and implementation of real estate development policies in order to provide for and sustain the needs of the current population and future generations given the need for smart cities.

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“…A priorstudy by Ramabodu, Kotze & Verster (2007) concluded that the South African property industry is unique because South Africa is a country of diversity and cultural differences that need to be acknowledged. Their findings illustrate the environment in which property investors in South Africa make investment decisions.…”

Section: Introductionmentioning

confidence: 99%

The Influence of Frame Dependence on Investment Decisions made by Listed Property Fund Managers in South Africa

Lowies¹,

Cloete²

2013

JEBS

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Behavioural finance describes investors' and managers'behaviour in terms of their interactions, andhow their behaviour subsequently influences financial and capital markets. One aspect of behavioural finance, frame dependence, reflects the fact that decision-makers may model decisions about problems using subjective frames. Such decisions may lead to errors in judgement. This study's objective was to determine whether frame dependence influences listed property fund managers in South Africa's property investment decisions.Therefore, the study examinedquestionsrelating to the disposition effect and loss aversion,as well asfactors influencing selling decisions and the time and difficulty involved in making buying and selling decisions. The study surveyed the fund managers of all South African-based property funds listed on the Johannesburg Securities Exchange (JSE). Non-parametric statistical measures were used.The resultsreveal the presence of the disposition effect and a strong desire to cut losses as a motivating factor to sell a property. In the context of the difficulties associated with, and time spent in, buying new properties, it appears that South African property fund managers are, to some extent, lossaverse. This study recommends that fund managers be alerted to the presence of frame dependence in their decisions, so that they canincorporate it in their normative investment strategies.They need to know that they are loss averse in their investment decision-making, resulting ina possible loss of perfectly positioned, profitable investment opportunities. This study expands the body of knowledge surrounding property investment decision behaviour in an emerging market.

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Diversity and value in Africa's real estate

Cited by 9 publications

References 2 publications

Heuristic-driven bias in property investment decision-making in South Africa

Heuristic-driven bias in property investment decision-making in South Africa

Towards Sustainability of Real Estate Development: An Integrative Review of Smart City Planning Considerations

The Influence of Frame Dependence on Investment Decisions made by Listed Property Fund Managers in South Africa

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