4.3.1. Political influences
For the purpose of this study, political influences include government influences, which are divided into two categories namely:
Fiscal policy, which includes recession, increasing government expenditure,
decreasing taxation, overheating, decreasing government expenditure and increasing tax.
Monetary policy, which includes recession, reducing interest rates,
increasing availability of credit, overheating, increasing interest rates and decreasing the availability of credit.
As McKenzie et al. (2011: 39) mention, fiscal and monetary policies are tools used by the government to fight the ills of inflation, recession and unemployment.
4.3.2. Economics for residential property development
For the purpose of this study, economics for the residential property development includes seasonal fluctuations, business cycles and cyclical changes, influences of long-term secular movements, macro-economic factors, micro-economic factors, supply, demand and financial analysis.
A formal definition of real estate economics states it is a study that uses economic principles, both macro and micro, to analyse the impact that national, regional, community and neighbourhood changes or trends have on real estate values and uses (Prinsloo and Prinsloo, 2004; McKenzie et al., 2011: 4). Real estate economics is not the study of general economics, nor is it a course in the practice of real estate.
Rather, real estate economics is the link between general economic theory and applied real estate practice (McKenzie et al., 2011: 4).
4.3.3. Social changes
For the purpose of this study, social changes (aspects) include: social-economic feasibility; social-media; demographic factors; urban growth patterns; property tendencies macro-economic factors; trends in the building industry; income and expenditure patterns and local economic conditions. To determine whether a development will be successful or not, the feasibility study takes all the relevant factors into account to establish whether the socio-economic climate is favourable for the active and effective implementation of the development (Cloete, 1999: 128;
Botha, 2013: 122). The potential market must be characterised by determining selected indicators of economic activity, of which the individual and joint movements correlate with movement of the market, as well as by the identification of socio-political factors having a positive or negative influence on the market (Cloete, 1999:
128; Botha, 2013: 122).
4.3.4. Technological changes
For the purpose of this study, technological changes include: technological systems;
working smarter, faster, more efficiently and effectively; delays; internet; search engines; social-media; advertisements; market prices; photography; interaction with consumers and potential clients and Wi-Fi (wireless fidelity). Continual developments in technology have raised the efficiency of many businesses and this has a massive impact on the way property transactions are conducted globally (Kutama, 2013). Kutama (2013) further states that with the right systems and processes in place, a person can work smarter rather than harder. These systems enable developers to be technologically advanced in their field of expertise and can possibly ensure that residential property developers are at the forefront with development projects, timeframes, transfers, bond registrations and closing of contracts.
4.3.5. Environmental regulations
For the purpose of this study environmental regulations include; World Commission on Environment and Development; World Business Council for Sustainable Development and The National Environmental Management Act. In addition time;
environmental sustainability; social sustainability; economic sustainability; property developers; environmental impact assessment; environmental statement;
environmental consultants; planning commission; approval of plans; Phase I and Phase II environmental assessment; building carbon emissions (C02); global warming, and SANS 10400 part XA and SANS 204, are included.
According to a journal article on environmental and resource economics in South Africa by Nahman et al. (2009: 350) “… all nations face the challenge of simultaneously meeting two imperatives: developing their economies to meet the needs of their people, and ensuring that the productivity and viability of the underlying ecosystems and ecosystem services are maintained at healthy levels over time.” In this same article, Nahman et al. (2009: 350) further explain that imperatives mentioned in the study are enshrined in the concept of sustainable development. This can be defined as: “… the integration of social, economic and environmental factors into planning, implementation and decision-making so as to ensure that development meets the needs of the present without compromising the ability of future generations to meet their own needs,” (Willaims, 2000: 6; van Wyk, 2007: 60; Pawlowski, 2010: 15; Botha, 2013: 25).
4.3.6. Legislation issues and mortgage bonds
For the purpose of this study, legislation issues and mortgage bonds include pre-sales finance, mortgage finance and conveyancing delays. One of the legal matters concerning conveyancing and mortgage bonds is delays. As mentioned by Nelson (2008) sellers should be aware of pitfalls and hidden costs, which can delay the registration of the transfer of a property. Most property transactions are closed with a general sale agreement and real estate agents will assist the buyer in ensuring a smooth transaction. Nelson (2008) further mentions that sellers must be aware of their responsibilities once the agreement is signed and a conveyancer is appointed.
4.3.7. Project management
For the purpose of this study, project management includes: project manager;
timeframes; budget; quality of workmanship; defined scope of works investigation into the possible factors that may cause development projects to be unsuccessful especially in the context of time and investigation into possible factors that may ensure success of residential development projects especially in the context of time.
According to Abu Bakar et al. (2012: 8) who cited the Project Management Institute (2004), Project management is defined as the art of directing and coordinating human and material resources throughout the life of a project by using modern management techniques to achieve predetermined objectives of scope, cost, time, quality and participation satisfaction. The answer to project success, failure, abandonment and collapse of building construction lies in efficient project management. Success of building construction projects must be ensured as their execution often involves substantial funds, loss through failure or abandonment, has a crippling effect on the capabilities of the investors, the financiers and the fact that scarce resources are unavailable for alternative use for a long period of time (Nwachukwu and Emoh, 2011: 1).
4.4. CONCLUSION
Chapter 2 presented an extensive review of the related literature explaining what residential property entails and Chapter 3 explained which supply chains of residential property development affect the lead-time. Chapter 4 operationalised the following variables identified during the survey of the literature: political influences;
property economics; social changes; technological changes; environmental factors;
legislation issues; mortgage bonds; project management and The Project Management Body of Knowledge (PMBOK). The next chapter presents the research methodology used to test the hypotheses and the lead-time management framework empirically.
CHAPTER FIVE
RESEARCH METHODOLOGY
The research methodology used to empirically test the hypotheses and the lead-time management framework will be presented in this chapter. The purpose of this study was to develop a framework of the on-time development of residential property in South Africa. The study consisted of a review of the related literature as well as an empirical study. For the empirical portion of the study, questionnaires were distributed to members of the sample population. This is a quantitative statistical approach. The sample strata and methodology used to conduct the study are addressed in detail below.