Historically the home or property development market in South africa has been vibrant. But when the current world economic slump began to take wait and see in September 2008, it drained the confidence out of many investors and current market nose-dived along with general financial crisis. But with the signs of economic recovery beginning to consider hold again, what prospects are there for becoming bitten in the industrial property store?
When industrial and commercial property prices reached a good solid low, it signaled to show your internet. Firstly that the market was severely depressed and was likely remain in that path for several years, but additionally that the bottom of the trough had been reached and kent ridge residence that the very best 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, and with laws of supply and demand in operation, with the excess of supply far outstripping demand, prices remained depressed.
However, explored 12 months has seen the signs and symptoms of recovery developing in the commercial sector, and 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 outlook on life. With economic forecasts being positive, albeit slow-moving, and prices being under they are, now a great time invest in. As confidence returns to the economy, the chance of new letting agreements is rising and properties are once again beginning to move, leading to a slow but steady rise in prices and rates. It is forecast that this trend will continue slowly but surely, depleting the supply surplus that 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 regarding long gestation period for first time developments to go to final fruition, the process needs to get kicked off now. Feasibility studies, surveys, finance – all in the things end up being in place before actual construction starting to reside.
All in many this is now a very positive time for property development. Industrial property investors have every reason to be cautiously optimistic, as of course to medium term prospects are looking very positive, and this is the time to speculate and make an investment.