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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 begin to take be patient in September 2008, it drained the confidence involving many investors and the market nose-dived along with the general finances. But with the signs of economic recovery beginning to consider hold again, what prospects are there for upset in the economic property trade?

When industrial and commercial property prices reached a fabulous low, it signaled 2 things. Firstly that the market was severely depressed and was likely to stay that way for several years, but additionally that the bottom of the trough were definitily reached in which the only way out, was up. With the market having stabilized at its new low, kent ridge hill residence it meant that the glut of distressed properties that had been pouring in had stopped, and together with laws of supply and demand in operation, more than excess of supply far outstripping demand, prices remained depressed.

However, the last 12 months has seen the indications of recovery going on in industrial municipal debt market sector, by means of 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 views. With economic forecasts being positive, albeit slow-moving, and costs being as little as they are, now is an effective time to order. As confidence returns to the economy, the potential for new letting agreements is booming and properties are much more beginning to move, introducing a slow but steady rise in prices and rates. It can be forecast that this trend will continue slowly but surely, depleting the supply surplus which will 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 any long gestation period kids developments arrive at final fruition, the process needs always be kicked off now. Feasibility studies, surveys, finance - all things must be in place before actual construction starting to reside.

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