The industrial Property Development Market – From Bust to Boom

Historically the house and property development market in South africa has been vibrant. But when the current world economic slump did start to take wait and see in September 2008, it drained the confidence associated with many investors and marketplace nose-dived along with the general finances. But with the signs of economic recovery beginning to take hold again, what prospects are there for a resurgence in the commercial property area?

When industrial and commercial property prices reached a fabulous low, it signaled two things. Firstly that the market was severely depressed and kent ridge hill residences showflat was likely remain in that opportunity for several years, but also that the bottom of the trough was in fact reached of which the only way 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 at a time laws of supply and demand in operation, the actual excess of supply far outstripping demand, prices remained depressed.

However, given out 12 months has seen the indications of recovery occurring in industrial municipal debt market 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 certainly one of the current optimistic outlook on life. With economic forecasts being positive, albeit slow-moving, and prices being under they are, now is a good time purchaser. As confidence returns to the economy, possibly new letting agreements is rising and properties are once again beginning to move, introducing a slow but steady rise in prices and rates. It is forecast that this trend continue slowly but surely, depleting the supply surplus may eventually trigger a new bout of property development taking venue.

Current thinking is that this may well lead a good industrial property boom in 2014/15. However with any long gestation period kids developments to go to final fruition, the process needs to get kicked off now. Feasibility studies, surveys, finance – all of those things must be in place before actual construction start to take place.

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

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