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An exploration of macro-economic determinants of real estate booms and declines in developing countries

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Abstract

In the real estate market, boom and decline patterns that influence the development of a country’s economy are often considered. However, there exists limited information on which factors cause the real estate expansion and declines to occur. Therefore, this research explored the factors that cause real estate booms and declines using data from the period 2008 to 2018. The study adopted secondary research using various literature on the real estate boom and decline outlooks for developing countries. Content analysis and fact-finding were used to analyse the secondary data collected to identify the factors that caused the real estate market booms and declines to occur. For in-depth analysis, this study chose to focus on a sample size of four developing countries that display common factors that influence real estate market phases. The results showed that the factors that influenced real estate boom and decline outcomes for the selected developing countries during the period of investigation can be categorised into macro- and micro-economic factors. These included interest rates, tax incentives and policies, economic cycles, population growth, supply and demand levels, number of buyers and sellers, and vacancy levels. The research provides information that could signal the state and direction of the real estate market at a particular time or period, which is relevant to various real estate market participants, including planners, developers, and investors. Further empirical studies are required for greater attention on how the real estate market factors could affect the development of a country.

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  1. Department of Finance and Investment Management, School of Management, College of Business and Economics, University of Johannesburg, Johannesburg, South Africa

    Lerato Phatudi & Chioma Okoro

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  1. Lerato Phatudi
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  2. Chioma Okoro
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Correspondence to Chioma Okoro.

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Phatudi, L., Okoro, C. An exploration of macro-economic determinants of real estate booms and declines in developing countries. J Hous and the Built Environ 38, 261–282 (2023). https://doi.org/10.1007/s10901-022-09957-x

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