QUANTIFYING THE SPATIAL VARIATION OF THE EFFECT OF COVID-19 ON PROPERTY MARKET ACTIVITIES IN KAMPALA USING GEOGRAPHICALLY WEIGHTED REGRESSION (GWR).

Abstract

The real estate sector has substantially been impacted by the onset of COVID-19 in Uganda. Studies conducted worldwide have indicated that, pandemics affect property market activities differently, and that the effect varies across space. 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, quantifies the spatial variability of the effect of COVID-19 on property market activities in Kampala district, Uganda. The study, therefore, took advantage of GIS’ spatial statistical analytical models (Getis-Ord Gi*, OLS, GWR) 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. The local model approach of GWR on the other hand, exposed a substantial effect of COVID-19 on property market activities spatially varying between -4% to 1%. It was further established that COVID-19 generated a negative effect in the two ends of the income distribution, with the effect increasing as one moves up or down along the curve. On the contrary, a positive effect was realized in the residential outskirts of the city where prices of land per acre were relatively low. Work from home, a reduction in people’s income as well as the composition of the population are the main drivers of the changes in property transactions (activity). The findings of the study underpin earlier postulations of various researchers that pandemics affect property market activity, however, the effect of the pandemics vary from one pandemic to another and from one place to another.

Keywords: Property Market Activity; COVID-19; Spatial statistical analytical models (OLS, Getis-Ord Gi*, GWR)