The economic Property Development Market – From Bust to Boom

Historically the home or property development market in South africa has been vibrant. Even so the current world economic slump began to take hold back in September 2008, it drained the confidence involving many investors and current market nose-dived plus the general economic climate. But with the signs of economic recovery beginning to take hold again, what prospects are there for a resurgence in the economic property area?

When industrial and commercial property prices reached a new low, it signaled two things. Firstly that the market was severely depressed and was likely remain in that path for several years, but also that the bottom of the trough ended up reached understanding that the sole method out, kent ridge residence was up. With the market having stabilized at its new low, it meant that the glut of distressed properties that were actually pouring in had stopped, and at a time laws of supply and demand in operation, the actual excess of supply far outstripping demand, prices remained depressed.

However, explored 12 months has seen the signs of recovery occurring in industry sector, and 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 a good example of the current optimistic probability. With economic forecasts being positive, albeit slow-moving, and costs being under they are, now constitutes a time purchaser. As confidence returns to the economy, the chance of new letting agreements is booming and properties are much more beginning to move, leading to a slow but steady rise in prices and rates. Is usually forecast until this trend continue slowly but surely, depleting the supply surplus which will eventually trigger a new bout of property development taking venue.

Current thinking is that this may well lead to an industrial property boom in 2014/15. Not surprisingly with associated with long gestation period moms and dads developments arrive at final fruition, the process needs to get kicked off now. Feasibility studies, surveys, finance – all of those things end up being in place before actual construction can begin to take place.

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