Macroeconomic leading indicators of listed property price movements in Nigeria and South Africa

Abstract

This article aims to identify macroeconomic leading indicators that influence changes in the listed property price movements in South Africa and Nigeria. This serves to improve the quantitative approaches to investment appraisal in emerging markets of sub-Saharan Africa. The data relating to macroeconomic leading indicators, including Johannesburg Stock Exchange (JSE) Listed Property (J253) quarterly price data, Nigerian listed real-estate data, and Macroeconomic indicator series for Nigeria and South Africa, were collected from Iress Expert Database, Stats SA, the Central Bank of Nigeria (CBN), the National Bureau of Statistics (Nigeria), and the World Bank. The article identifies that coincident indicators and the exchange rate have a positive and significant relationship with the JSE-listed real estate in the South African market. While the bank lending rate, the consumer price index, and the Treasury bill rate (TBR) are identified as reliable indicators in the Nigerian listed real-estate market. The results show that investors must pay attention to these indices in their choice of the market(s) within the sub-Saharan African context, as this will guarantee capital appreciation or growth.