The economic 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 begin to take suppress in September 2008, it drained the confidence involving many investors and the market nose-dived coupled with general finances. But with the signs of economic recovery beginning to take hold again, what prospects are there for a resurgence in the industrial property store?

When industrial and kent ridge residence commercial property prices reached a good solid low, it signaled a pair of things. Firstly that the market was severely depressed and was likely to keep that opportunity for several years, but as well that the bottom of the trough were definitily reached of which the sole method out, was up. Together with market having stabilized at its new low, it meant that the glut of distressed properties that are already pouring in had stopped, and with the laws of supply and demand in operation, that’s not a problem excess of supply far outstripping demand, prices remained depressed.

However, the last 12 months has seen the symptoms of recovery as far back as in the commercial sector, together 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 an illustration of this the current optimistic probability. With economic forecasts being positive, albeit slow-moving, and costs being as low as they are, now is an effective time purchaser. As confidence returns to the economy, the opportunity for new letting agreements is booming and properties are again beginning to move, resulting in a slow but steady rise in prices and rates. It can be forecast that 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 for industrial property boom in 2014/15. Keep in mind with such a long gestation period for new developments to arrive at final fruition, the process needs to be kicked off now. Feasibility studies, surveys, finance – all of the listed things should be in place before actual construction can begin to reside.

All in many this has grown to be a very positive time for property development. Industrial property investors have every reason to be cautiously optimistic, as it is definitely to medium term prospects are looking very positive, and now is the time to speculate and make an investment.