Historically the house and property development market in South africa has been vibrant. Coverage the current world economic slump begin to take be patient in September 2008, it drained the confidence out of many investors and the actual marketplace nose-dived along with the general economic situation. But with the signs of economic recovery beginning to look at hold again, what prospects are there for becoming bitten in the commercial property area?
When industrial and commercial property prices reached a new low, it signaled a pair of things. Firstly that the market was severely depressed and was likely in which to stay that means for several years, but additionally that the bottom of the trough had been reached this the sole method out, was up. With the market having stabilized at its new low, it meant how the glut of distressed properties that were actually pouring in had stopped, and together with laws of supply and demand in operation, the actual excess of supply far outstripping demand, prices remained depressed.
However, you will develop 12 months has seen the signs and symptoms of recovery going on in industry sector, kent ridge hill residences showflat and with property prices still artificially low, it has begun to stimulate demand, as property development speculators are one again sensing the opportunity of making good short to medium term returns on new investments.
Office properties in particular are a good example of the current optimistic outlook. With economic forecasts being positive, albeit slow-moving, and prices being the small sum of they are, now constitutes a time to buy. As confidence returns to the economy, the potential for new letting agreements is booming and properties are once again beginning to move, leading to a slow but steady rise in prices and rates. It is forecast this kind of trend will continue slowly but surely, depleting the supply surplus may eventually trigger a new bout of property development taking venue.
Current thinking is until this may well lead with regard to an industrial property boom in 2014/15. Certainly with associated with long gestation period for new developments arrive at final fruition, the process needs to be kicked off now. Feasibility studies, surveys, finance – all of these things must be in place before actual construction starting to show up.
All in many this is now a very positive time for property development. Industrial property investors have every reason to get cautiously optimistic, as simple to medium term prospects are looking very positive, and the next step is to speculate and invest.