An analysis of residential land prices and fundamentals in Mauritius

Abstract

This study dwells on an analysis of how fundamental factors affect residential land prices in Mauritius. A further aim is to depict if the fundamentals have the same effect on land prices at the national level, as well as the regional level. Regional differentiation in terms of urban and rural residential land prices is made, to explain how these regional differences are due to the influence of fundamental factors on land prices. A fixed-effect panel regression technique over the period 2000 – 2019 is used for the case of the Mauritian residential land market. It is found that the variable income is significant at the national level and in all regions, with a more significant influence on land prices in rural regions. Another variable found to be important in explaining land prices at the national level is population. In the urban region, the population was positively significant in explaining land prices unlike in rural regions. The interest rate was also negatively significant in explaining land prices in both urban and rural regions. Whilst supply-side factors were observed to be insignificant in explaining land prices. Thorough knowledge of the factors explaining regional land price differences is deemed important for policymakers.