The commercial Property Development Market – From Bust to Boom

Historically the exact property development market in South africa has been vibrant. Shield for your windshield the current world economic slump did start to take wait and see in September 2008, it drained the confidence involving many investors and the actual marketplace nose-dived along with the general finances. But with the signs of economic recovery beginning to be able to hold again, what prospects are there for becoming bitten in the industrial property trade?

When industrial and commercial property prices reached your own low, it signaled a couple of things. Firstly that the market was severely depressed and was likely to stay that opportunity for several years, but as well that the bottom of the trough were definitily 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 pouring in had stopped, and with laws of supply and demand kent ridge hill residences in operation, while excess of supply far outstripping demand, prices remained depressed.

However, the last 12 months has seen the signs of recovery going on in industry sector, other than 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 one among the current optimistic outlook on life. With economic forecasts being positive, albeit slow-moving, and costs being as little as they are, now is an effective time purchaser. As confidence returns to the economy, the chance of new letting agreements is rising and properties are much more beginning to move, bringing about a slow but steady rise in prices and rates. It is forecast this specific trend continues slowly but surely, depleting the supply surplus may eventually trigger a new bout of property development taking place.

Current thinking is this may well lead for industrial property boom in 2014/15. However with associated with long gestation period for new developments to go to final fruition, the process needs always be kicked off now. Feasibility studies, surveys, finance – all of those things must be in place before actual construction can begin to reside.

All buying this is already a very positive time for property development. Industrial property investors have every reason to cautiously optimistic, as the short to medium term prospects are looking very positive, and this is the time to speculate and sow.