The industrial Property Development Market – From Bust to Boom

Historically the house and property development market in South africa has been vibrant. Even so the current world economic slump did start to take wait and see in September 2008, it drained the confidence coming from many investors and marketplace nose-dived along with general economic situation. But with the signs of economic recovery beginning to look at hold again, what prospects are there for an increase in the industrial property store?

When industrial and commercial property prices reached another low, it signaled a pair of things. Firstly that the market was severely depressed and was likely remain in that approach for several years, but also that the bottom of the trough were definitily reached understanding that the best out, was up. Together with market having stabilized at its new low, it meant how the glut of distressed properties that had been pouring in had stopped, and together with laws of supply and demand in operation, with the excess of supply far outstripping demand, prices remained depressed.

However, explored 12 months has seen the warning signs of recovery as far back as 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 an illustration of the current optimistic views. With economic forecasts being positive, albeit slow-moving, and prices being at only they are, now constitutes a time to buy. As confidence returns to the economy, the chance of new letting agreements is booming and properties are again beginning to move, resulting in a slow but steady rise in prices and rates. It is forecast this specific trend continue slowly but surely, depleting the supply surplus that eventually trigger a new bout of property development taking place.

Current thinking is this specific may well lead a good industrial property boom in 2014/15. Of course with this long gestation period for first time developments to arrive at final fruition, the process needs to get kicked off now. Feasibility studies, kent ridge hill residences surveys, finance – all in the things end up being in place before actual construction starting to take place.

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