Browsing by Author "Mpofu, Bekithemba"

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The challenges and benefits associated with residential investment in South Africa: residential REIT and portfolio manager perspectives
(University of the Witwatersrand, Johannesburg, 2023) Van Straaten, Kevin; Simbanegavi, Prisca; Mpofu, Bekithemba
A common theme in addressing critical housing shortages is the call to leverage private sector resources using REITs. Despite South African having critical affordable housing shortages, REIT exposure to residential is far below the global REIT market average. Existing research brings to light the mixed views and perceptions between different stakeholders about the challenges and risks associated with residential REITs. This is exacerbated by the lack of input from managers of residential REITs and residential funds which is critical to establish a more in depth understanding of the characteristics of the sector. The purpose of this research was to understand the challenges faced, methods to overcome these challenges, and the unique benefits that residential investment offers from the perspectives of managers of residential REITs and large scale residential rental portfolios in South Africa. This was achieved using a qualitative survey consisting of semi-structured interviews with managers and executives of residential REITS and large scale residential rental portfolios. The findings provide a more granular look at some of the challenges faced by these key stakeholders, which provide a deep insight into the characteristics of the sector. The key finding is that the limited track record of residential REITs is cause for many of the challenges associated with residential investment in South Africa. Residential portfolio and REIT managers are implementing unique strategies to respond to some of challenges that arise in the context of South Africa such as a shift toward month-to-month leases and exploring methods of reducing utility costs which are increasing at above inflationary rates. These findings make a valuable contribution to the limited literature on residential REITs in South Africa and include insights from the stakeholders that are most acquainted with the sector which is key to helping broaden our understanding of the challenges and benefits of residential investment in South Africa. Understanding these characteristics is crucial in further developing and growing the residential REIT sector which has the potential to help leverage private sector resources to address the critical housing shortages in South Africa and Africa.
The impact of inflation on house prices in South Africa: effects of COVID-19
(University of the Witwatersrand, Johannesburg, 2024-07) Simbanegavi, Prisca; Weaich, Malcom; Mpofu, Bekithemba; Moobela, Cletus; Laryea, Samuel; Li, Baizhan; Essah, Emmanuel Adu; Mensah, Sarfo; Liu, Hong; Yao, Runming
This study investigates the impact of inflation on house prices in South Africa, with a particular focus on the effects of the COVID-19 pandemic. The research aims to elucidate the nature of the relationship between inflation and housing, and to determine how the pandemic has influenced this dynamic. Utilising monthly data from January 2010 to April 2022, the study employs Johansen cointegration and Granger causality tests to assess long-term and causal relationships, respectively. The findings confirm a positive long-term relationship between house prices and inflation, indicating that housing serves as an effective hedge against inflation. However, the results also reveal structural breaks in this relationship, with significant changes observed during the COVID-19 period. The Vector Error Correction Model (VECM) highlights short-run adjustments and the speed of return to equilibrium. This study provides valuable insights for investors and policymakers, demonstrating the resilience of housing investments during economic disruptions and underscoring the importance of considering regional and temporal factors in real estate investment strategies.