Historically the real estate development market in South africa has been vibrant. Shield for your windshield the current world economic slump started take wait and see in September 2008, it drained the confidence out of many investors and the market nose-dived along with general finances. But with the signs of economic recovery beginning to look at hold again, what prospects are there for upset in the commercial property markets?
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 keep that way for several years, but that the bottom of the trough are already reached of which the very best out, was up. Is not market having stabilized at its new low, it meant that the glut of distressed properties that are already pouring in had stopped, and with laws of supply and demand in operation, that’s not a problem excess of supply far outstripping demand, prices remained depressed.
However, tackled . 12 months has seen the warning signs of recovery developing in the commercial sector, 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 an illustration of this the current optimistic outlook on life. With economic forecasts being positive, albeit slow-moving, kent ridge hill residences showflat and prices being as low as they are, now constitutes a time to buy. As confidence returns to the economy, the chance of new letting agreements is rising and properties are again beginning to move, introducing a slow but steady rise in prices and rates. It can be forecast this specific trend continues slowly but surely, depleting the supply surplus may eventually trigger a new bout of property development taking point.
Current thinking is until this may well lead for industrial property boom in 2014/15. Keep in mind with this long gestation period kids developments to find final fruition, the process needs staying kicked off now. Feasibility studies, surveys, finance – all of these things must be in place before actual construction start to be fulfilled.
All within all this is now a very positive time for property development. Industrial property investors have every reason in order to cautiously optimistic, as simple to medium term prospects are looking very positive, and the time has come to speculate and sow.