Financial implications of the nationalization of land on household disposable income in South Africa
This research studies the financial effects of land nationalization on household disposable income in South Africa. The paper reviews the financial effects of land reforms in selected Asian, African, European and North American countries. The paper will test the effect of weaker collateral provided to lenders as a result of nationalizing of land. The dependent variable selected to test the financial effect of weaker collateral provided by households in South Africa is the credit risk premium charged by lenders on mortgage bond debt. The effect on household disposable income is calculate using the incremental credit risk premium which would be levied by lenders in the case of land nationalization. The paper covers data from 1975 to 2019 where available. The paper used an empirical model to run multiple regression using ordinary least squares. The independent variables utilized include household debt to residential property price; foreign exchange rate, gross domestic product growth and inflation.
A research report submitted in fulfilment of the requirements for the degree of Masters of Management in Finance and Investment (MMFI) to the Faculty of Commerce, Law and Management, Wits Business School, University of the Witwatersrand, Johannesburg, 2020