Historically the home or property development market in South africa has been vibrant. Even so, if the current world economic slump did start to take be patient in September 2008, it drained the confidence out of many investors and the market nose-dived along with general economic situation. But with the signs of economic recovery beginning to adopt hold again, what prospects are there for becoming bitten in the commercial property markets?
When industrial and commercial property prices reached your own low, it signaled a couple of things. Firstly that the market was severely depressed and was likely remain in that opportunity for several years, but also that the bottom of the trough were definitily reached understanding that the sole method out, was up. With the market having stabilized at its new low, it meant how the glut of distressed properties that are already pouring in had stopped, kent ridge hill residences price and at a time laws of supply and demand in operation, while excess of supply far outstripping demand, prices remained depressed.
However, the last 12 months has seen the signs and symptoms of recovery taking place in industrial municipal debt market sector, other than 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 views. With economic forecasts being positive, albeit slow-moving, and costs being at only they are, now constitutes a time purchase. As confidence returns to the economy, the chance of new letting agreements is booming and properties are again beginning to move, creating a slow but steady rise in prices and rates. Is usually forecast that this trend will continue slowly but surely, depleting the supply surplus that eventually trigger a new bout of property development taking place.
Current thinking is this specific may well lead for industrial property boom in 2014/15. Of course with this long gestation period a great deal of developments to come to final fruition, the process needs to be kicked off now. Feasibility studies, surveys, finance – all in the things should be in place before actual construction can start to take place.
All for all this has grown a very positive time for property development. Industrial property investors have every reason to cautiously optimistic, as quick to medium term prospects are looking very positive, and now is the time to speculate and develop.