The industrial Property Development Market – From Bust to Boom

Historically the real estate development market in South africa has been vibrant. Shield for your windshield the current world economic slump started take restrain in September 2008, it drained the confidence coming from many investors and the nose-dived along with general financial crisis. But with the signs of economic recovery beginning to take hold again, what prospects are there for an increase in the economic property trade?

When industrial and commercial property prices reached a new low, it signaled a pair of things. Firstly that the market was severely depressed and was likely to keep that approach for several years, but also that the bottom of the trough were definitily reached understanding that the best out, was up. With the market having stabilized at its new low, it meant how the glut of distressed properties that were actually pouring in had stopped, and at a time laws of supply and demand in operation, while excess of supply far outstripping demand, prices remained depressed.

However, given out 12 months has seen the signs of recovery as far back as in sector sector, by means of 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 outlook. With economic forecasts being positive, albeit slow-moving, and costs being as little as they are, now constitutes a time purchaser. As confidence returns to the economy, the chance of new letting agreements is booming and properties are once again beginning to move, bringing about a slow but steady rise in prices and rates. It is forecast this specific trend continue slowly but surely, depleting the supply surplus which will eventually trigger a new bout of property development taking place.

Current thinking is this kind of may well lead with regard to an industrial property boom in 2014/15. Certainly with regarding long gestation period for new developments to go to final fruition, the process needs to be kicked off now. Feasibility studies, kent ridge hill residences price surveys, finance – all of the listed things should be in place before actual construction can start to reside.

All within all this has grown to be a very positive time for property development. Industrial property investors have every reason in order to cautiously optimistic, as of course to medium term prospects are looking very positive, and the time has come to speculate and sow.