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Determining the impact of low-cost housing development on nearby property prices using discrete choice analysis

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  • M. Du Preez
  • M.C. Sale

Abstract

This paper presents an application of the conditional logit model to a small, Nelson Mandela Bay neighbourhood housing data set, with the objective of determining the impact of proximity to a low-cost housing development on nearby property prices. The results of this pilot study show that the average household in the neighbourhood of Walmer is willing to pay between R27 262 and R195 564 to be located 86m further away from an existing low—cost housing development. In addition to this, the probability of choosing a specific house increases if the house has a swimming pool, an electric fence, the lower its price and the closer it is to the nearest school.

Suggested Citation

  • M. Du Preez & M.C. Sale, 2012. "Determining the impact of low-cost housing development on nearby property prices using discrete choice analysis," Working Papers 265, Economic Research Southern Africa.
  • Handle: RePEc:rza:wpaper:265
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