Historically the real estate development market in South africa has been vibrant. Even so the current world economic slump started take hold back in September 2008, it drained the confidence associated with your many investors and marketplace nose-dived plus the general economic climate. But with the signs of economic recovery beginning to adopt hold again, what prospects are there for an upsurge in the commercial property area?
When industrial and commercial property prices reached another low, it signaled a pair of things. Firstly that the market was severely depressed and was likely in which to stay that opportunity for several years, kent ridge hill residence but also that the bottom of the trough were definitily reached and that the greatest out, was up. Is not market having stabilized at its new low, it meant that the glut of distressed properties that had been pouring in had stopped, and together 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 symptoms of recovery occurring in industry sector, by means of property prices still artificially low, this 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 probability. With economic forecasts being positive, albeit slow-moving, and prices being under they are, now constitutes a time purchase. As confidence returns to the economy, the chance of new letting agreements is booming and properties are much more beginning to move, introducing a slow but steady rise in prices and rates. Always be forecast this specific trend continue slowly but surely, depleting the supply surplus that eventually trigger a new bout of property development taking place.
Current thinking is that this may well lead with regard to an industrial property boom in 2014/15. However with this long gestation period kids developments to find final fruition, the process needs to be kicked off now. Feasibility studies, surveys, finance – all things should be in place before actual construction start to reside.
All buying this has grown a very positive time for property development. Industrial property investors have every reason to be cautiously optimistic, as quick to medium term prospects are looking very positive, and the next step is to speculate and develop.