The commercial Property Development Market – From Bust to Boom

Historically the house and property development market in South africa has been vibrant. Even so, if the current world economic slump did start to take suppress in September 2008, it drained the confidence associated with many investors and marketplace nose-dived plus the general economic climate. But with the signs of economic recovery beginning to adopt hold again, what prospects are there for upset 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 keep that means for several years, but as well that the bottom of the trough were definitily reached understanding that the only way out, 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 with laws of supply and demand in operation, the actual excess of supply far outstripping demand, prices remained depressed.

However, the last 12 months has seen the signs and symptoms of recovery going on in the commercial sector, along 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 one among the current optimistic outlook on life. With economic forecasts being positive, albeit slow-moving, and prices being as low as they are, now constitutes a time to order. As confidence returns to the economy, the opportunity for new letting agreements is rising and properties are again beginning to move, resulting in a slow but steady rise in prices and rates. It can be forecast this kind of trend continues 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 with regard to an industrial property boom in 2014/15. Keep in mind with regarding long gestation period kids developments to arrive at final fruition, the process needs for kicked off now. Feasibility studies, surveys, finance – all in the things should be in place before actual construction can start to take place.

All in all this will finally be a very positive time for property development. Industrial property investors have every reason in order to cautiously optimistic, as the short to medium term prospects are looking very positive, kent ridge hill residences and now is the time to speculate and develop.