The determinants of house prices in Namibia and their implications on housing affordability

Nandago, H. N. (2015-04)

Thesis (MDF)--Stellenbosch University, 2015.


ENGLISH ABSTRACT: This study attempts to establish the determinants of house prices in Namibia and their implications foraffordability of houses. The study made use of the ARDL time series model. The study established that the seven variables in the study are cointegrated. The cointegration results enabled the specification and estimation of the ARDL Error Correction Model. The results established that gross domestic product and interest rates are important in explaining the variations in house prices in the short run. Ironically, money supply and inflation, which are closely linked, were found not to affect house prices in the short run. In addition, national domestic credit, which was used as a proxy for total mortgages advanced in the country,wasnot a significant explanation of house prices in the short run. The study also established that the independent variables included in the ARDL Error Correction Model collectively influence house prices in Namibia in the long run. The implication of this is that policies that are meant to influence house prices in the long term can actually target any one or a combination of the variables included in the study. The main recommendation emanating from the study is that the government should redouble its efforts to provide affordable land and housing to the lower and/or middle income households in Namibia.

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