The commercial Property Development Market – From Bust to Boom

Historically the property development market in South africa has been vibrant. Shield for your windshield the current world economic slump started to take restrain in September 2008, it drained the confidence coming from many investors and the actual marketplace nose-dived considering the general finances. But with the signs of economic recovery beginning to adopt hold again, what prospects are there for becoming bitten in the economic property market?

When industrial and commercial property prices reached your own low, it signaled a pair of things. Firstly that the market was severely depressed and was likely in which to stay that path for several years, but that the bottom of the trough were definitily reached understanding that the sole method out, was up. While using market having stabilized at its new low, it meant that the glut of distressed properties that were being pouring in had stopped, and that isn’t 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 indications of recovery occurring in industry sector, other than 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 costs being as low as they are, now is an effective time to buy. As confidence returns to the economy, the chance of new letting agreements is booming and properties are once again beginning to move, introducing a slow but steady rise in prices and rates. It is forecast that trend continue slowly but surely, depleting the supply surplus which will eventually trigger a new bout of property development taking venue.

Current thinking is this kind of may well lead a good industrial property boom in 2014/15. Of course with such a long gestation period for kent ridge residence first time developments to arrive at final fruition, the process needs for kicked off now. Feasibility studies, surveys, finance – all of these things end up being in place before actual construction start to take place.

All within all this will finally be a very positive time for property development. Industrial property investors have every reason become cautiously optimistic, as of course to medium term prospects are looking very positive, and it is now time to speculate and sow.