Quantifying the Spatial Variation of the effect of COVID-19 on Property Market Activity in Kampala District.

Abstract

The real estate sector is one of the sectors that has been greatly affected by the onset of COVID-19 in Uganda. Studies conducted worldwide have indicated that, pandemics affect property market transactions differently, and that the effect varies from one place to another. Studies conducted in Uganda, however, have not captured or quantified how the effect of COVID-19 on property market transactions varies from one place to another. This study therefore was undertaken to quantify the spatial variation of the effect of COVID-19 on property market activities in Kampala District using Geographically Weighted Regression (GWR) models. The study was conducted through the analysis of property transaction records from March, 2019 to March, 2021 same epoch with the first wave of COVID-19 in Kampala District. The socioeconomic and demographic composition of the population, as well as the physical characteristics of the properties were linked with spatial-statistical analytical models of: Ordinally Least Squares (OLS), global Moran’s I, Hotspot analysis (Getis-Ord Gi*), and GWR to determine spatial patterns, and establish the relationship between property market activities and the spread of COVID-19. The results of the study indicated that on average; parcel size, population density, percentage of the working were effective determinants of property market activities in Kampala District. In addition to the above variables, COVID-19 proved effective and unique in explaining variations in property transactions during the outbreak of the deadly disease. The results of the study further disclosed the disproportionate distribution of COVID-19 cases and property market transactions in Kampala District. Additionally, COVID-19 hotspots were registered in areas of concentrations i.e., office spaces, high road density, and near trade and business facilities whereas hotspots of property activities were registered in the residential outskirts of the city. However, the local model approach of GWR exposed a substantial effect of COVID-19 on property market activities spatially varying between -39% to 10%. The results of the study can be used as a supporting tool in the development of real estate policies, evaluation of potential investment areas, and the development of resilient cities by supporting areas that are likely to be worst hit by the occurrence of pandemics. Subsequent studies should, however, consider property types in addition to incorporating data at varying spatial scales.