The industrial Property Development Market – From Bust to Boom

Historically the real estate development market in South africa has been vibrant. But when the current world economic slump did start to take hold back in September 2008, it drained the confidence out of many investors and current market nose-dived along with the general economic situation. But with the signs of economic recovery beginning to be able to hold again, what prospects are there for kent ridge hill residence upset in the economic property markets?

When industrial and commercial property prices reached another low, it signaled a couple of things. Firstly that the market was severely depressed and was likely to stay that means for several years, but that the bottom of the trough are already reached understanding that the sole method out, was up. Is not market having stabilized at its new low, it meant how the glut of distressed properties that were pouring in had stopped, and at a time laws of supply and demand in operation, while excess of supply far outstripping demand, prices remained depressed.

However, the last 12 months has seen the signs and symptoms of recovery as far back as in sector 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 a good example of the current optimistic prospect. With economic forecasts being positive, albeit slow-moving, and costs being at only they are, now is a good time purchase. As confidence returns to the economy, the potential for new letting agreements is rising and properties are once again beginning to move, leading to a slow but steady rise in prices and rates. It can be forecast that trend continues slowly but surely, depleting the supply surplus that eventually trigger a new bout of property development taking venue.

Current thinking is until this may well lead with regard to an industrial property boom in 2014/15. However with such a long gestation period for first time developments to arrive at final fruition, the process needs to get kicked off now. Feasibility studies, surveys, finance – all in the things should be in place before actual construction can begin to reside.

All in many this is already a very positive time for property development. Industrial property investors have every reason in order to cautiously optimistic, as the short to medium term prospects are looking very positive, and the next step is to speculate and develop.