Market Institutions and the Future Course of the South African Property Market

This paper develops the proposition that the continued socio- economic fragmentation of the South African property market can largely be explained by the economic and social institutional framework that continues to characterise this market . The proposition is developed within the context of the Institutional Economics literature, and demonstrates the relevance of this theoretical framework in explaining the present and future trajectory of the South African property market. While recent public and private sector policies and interventions have attempted to alter the players in this market , there is growing evidence and concern that a significant institutional ì lock in ì continues to perpetuate historical market outcomes. The South African institutional framework is not only driven by the relationship and actions of existing market players, but is reinforced by town planning decisions that perpetuate historically fragmented markets. Thus it can be argued that unless greater effort is made in changing existing institutional dynamics , it is unlikely to expect a significant transformation in the trajectory of the South African built environment and property market. Indirectly the research outcome has significant implications for the development of property markets in emerging economies.