The industrial Property Development Market – From Bust to Boom

Historically the home or property development market in South africa has been vibrant. But when the current world economic slump started take hold back in September 2008, it drained the confidence involving many investors and the nose-dived along with general economic situation. 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 area?

When industrial and commercial property prices reached your own low, it signaled 2 things. Firstly that the market was severely depressed and was likely remain in that path for several years, but as well that the bottom of the trough had been reached this the greatest out, was up. With the market having stabilized at its new low, it meant that the glut of distressed properties that were pouring in had stopped, and at a time 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 signs and symptoms of recovery developing in the commercial sector, by means of 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 prospect. With economic forecasts being positive, albeit slow-moving, and costs being as little as they are, now constitutes a time to order. As confidence returns to the economy, possibly new letting agreements is rising and properties are again beginning to move, introducing a slow but steady rise in prices and rates. It is forecast until this trend continue slowly but surely, depleting the supply surplus that eventually trigger a new bout of property development taking place.

Current thinking is until this may well lead a good industrial property boom in 2014/15. Not surprisingly with this long gestation period for new developments to go to final fruition, the process needs to get kicked off now. Feasibility studies, surveys, finance – all of the listed things should be in place before actual construction start to take place.

All in all this has grown a very positive time for kent ridge hill residences showflat 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.