The Effect of Neighbourhood Enclosure on Property Values

[摘要] Spiralling violent crime in South Africa has led to the increased use of accesscontrol to restrict access to suburbs and thus make it more difficult toperpetrate violent crime against residents. This neighbourhood enclosurenormally takes the form of booms, palisade fences and security guards toclose off entire suburbs that were once or still are public property. This studyexamines the effect of the implementation of neighbourhood enclosure onproperty values. The primary methodology used to research this concentratedon the analysis of residential property values, bond approvals and relativeamounts of property transferred within the period of late 2002 and mid 2004.Analysis was based on information available at the deed’s office. Limitationsincluded the small sample size and the availability of information. Applicantsfor suburban closures can use the results of the study to verify or discreditclaims of property value increases. Municipalities can match property valuesto services and rates.Results showed that property values that were found to be either similar inadjacent open and enclosed areas or more expensive in enclosed areas. Thelatter trend was evident in higher value properties. This illustrates a higherdemand for properties in these enclosed areas than in the adjacent openareas. Further analysis of prices showed that, in all cases over the sameperiod, prices increased by more in enclosed areas than in open areas. Thisstatistic proves the hypothesis, that neighbourhood enclosure increases thevalue of properties within the enclosure when compared to similar propertiesin adjacent open areas. Analysis of the value of bonds granted in an areashowed that banks appear to ignore the enclosure status of the immediatearea.

[发布机构] University of the Witwatersrand