The economic Property Development Market – From Bust to Boom

Historically the exact property development market in South africa has been vibrant. Even so, if the current world economic slump started to take hold back in September 2008, it drained the confidence associated with many investors and current market nose-dived considering the general economic climate. But with the signs of economic recovery beginning to take hold again, what prospects are there for an increase in the commercial property store?

When industrial and commercial property prices reached a fabulous low, it signaled two things. Firstly that the market was severely depressed and was likely to keep that opportunity for several years, but also that the bottom of the trough had been reached in which the very best out, was up. Is not market having stabilized at its new low, it meant how the glut of distressed properties that are already pouring in had stopped, and together with laws of supply and demand in operation, that’s not a problem excess of supply far outstripping demand, prices remained depressed.

However, given out 12 months has seen the signs and symptoms of recovery as far back as 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 an illustration of this the current optimistic outlook. With economic forecasts being positive, albeit slow-moving, and prices being at only they are, now is an effective time purchase. As confidence returns to the economy, the opportunity of new letting agreements is rising and kent ridge hill residences properties are again beginning to move, bringing about a slow but steady rise in prices and rates. It is forecast that trend continue slowly but surely, depleting the supply surplus that eventually trigger a new bout of property development taking point.

Current thinking is this may well lead to an industrial property boom in 2014/15. Certainly with this long gestation period for first time developments to find final fruition, the process needs always be kicked off now. Feasibility studies, surveys, finance – all of the listed things must be in place before actual construction start to show up.

All in many this has grown a very positive time for property development. Industrial property investors have every reason become cautiously optimistic, as quick to medium term prospects are looking very positive, and now is the time to speculate and develop.