The industrial Property Development Market – From Bust to Boom
Historically the house and property development market in South africa has been vibrant. Even so the current world economic slump begin to take wait and see in September 2008, it drained the confidence out of many investors and the nose-dived considering the general economic climate. But with the signs of economic recovery beginning to consider hold again, what prospects are there for an increase in the commercial property market?
When industrial and commercial property prices reached another low, it signaled two things. Firstly that the market was severely depressed and was likely in which to stay that means for several years, but as well that the bottom of the trough ended up reached in which the only way out, was up. With all the market having stabilized at its new low, it meant how the glut of distressed properties that had been pouring in had stopped, and together with laws of supply and demand in operation, with the excess of supply far outstripping demand, prices remained depressed.
However, you will develop 12 months has seen the warning signs of recovery occurring in the commercial sector, together 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 probability. With economic forecasts being positive, albeit slow-moving, and costs being as low as they are, now is a good time to buy. As confidence returns to the economy, the potential for new letting agreements is rising and properties are much more beginning to move, leading to a slow but steady rise in prices and rates. It can be forecast that this trend continues slowly but surely, kent ridge hill residence depleting the supply surplus which will eventually trigger a new bout of property development taking venue.
Current thinking is this may well lead a good industrial property boom in 2014/15. Certainly with associated with long gestation period for first time developments to come to final fruition, the process needs to be kicked off now. Feasibility studies, surveys, finance – all in the things end up being in place before actual construction can start to take place.
All within all this will finally be 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 put.
