Exploring the spatial variation of the effect of Covid-19 on property market activity in Kampala District

Abstract

The real estate sector in Uganda has been substantially impacted by the onset of COVID-19 in this country. Studies conducted worldwide have indicated that, pandemics affect property market activities differently. Additionally, the effect of pandemics on property market activity varies from one place to another. Studies conducted in Uganda, however, have not captured how the effect of COVID-19 on property market activities varies from one place to another. This study therefore explored the spatial variability of the effect of COVID-19 on property market activities in Kampala district, Uganda. The study took advantage of the spatial statistical analytical models advocated by GIS (Getis-Ord Gi*, OLS, GWPR) and a unique dataset of property transactions registered by the Ministry of Lands, Housing and Urban Development (MLHUD) during the outbreak of the deadly disease. Whereas the study observed high volumes of property transactions registered in the residential outskirts of the city, low volumes were observed in the Central Business District (CBD) and the low-income areas of the eastern and western parts of the district. On the other hand, the local model approach of GWPR exposed the substantial effects of COVID-19 on property market activities that varied from -39% to 10%. It was further established that COVID-19 generated negative effects in areas with low and high prices of land per acre, to the extent of increasing as the prices dropped or increased. On the contrary, a positive effect was realized in the residential outskirts of the city where prices of land per acre were moderate. Work from home, land parcel size as well as the composition of the population, proved to be the main drivers of the changes in property market transactions (activity). The findings of the study underpin the earlier postulations of various researchers that pandemics affect property market activity. However, the effects of the pandemics vary from one pandemic to another and from one place to another.