Historically the property development market in South africa has been vibrant. Even so, if the current world economic slump started to take be patient in September 2008, it drained the confidence associated with your many investors and the nose-dived along with the general economic climate. But with the signs of economic recovery beginning to adopt hold again, what prospects are there for becoming bitten in the economic property markets?
When industrial and commercial property prices reached another low, it signaled a couple of things. Firstly that the market was severely depressed and was likely keep that means for several years, but that the bottom of the trough was in fact reached of which the best out, was up. With all the market having stabilized at its new low, it meant that the glut of distressed properties that had been pouring in had stopped, and at a time laws of supply and demand in operation, the actual excess of supply far outstripping demand, prices remained depressed.
However, tackled . 12 months has seen the symptoms of recovery as far back as in industry sector, along with 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 prospect. With economic forecasts being positive, albeit slow-moving, and prices being as little as they are, now is a good time purchaser. As confidence returns to the economy, the opportunity of new letting agreements is rising and properties are much more beginning to move, introducing a slow but steady rise in prices and rates. It is forecast this specific trend will continue slowly but surely, depleting the supply surplus which will eventually trigger a new bout of property development taking point.
Current thinking is that this may well lead a good industrial property boom in 2014/15. Certainly with this long gestation period for first time developments arrive at final fruition, the process needs to get kicked off now. Feasibility studies, surveys, kent ridge hill residence finance – all in the things should be in place before actual construction starting to show up.
All within all this has grown a very positive time for property development. Industrial property investors have every reason in order to cautiously optimistic, as the short to medium term prospects are looking very positive, and the next step is to speculate and invest.