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The commercial Property Development Market – From Bust to Boom

Historically the property development market in South africa has been vibrant. Even so, if the current world economic slump started to take restrain in September 2008, it drained the confidence coming from many investors and the market nose-dived plus the general economic situation. But with the signs of economic recovery beginning to consider hold again, what prospects are there for upset in the economic property market?

When industrial and commercial property prices reached another low, it signaled a pair of things. Firstly that the market was severely depressed and kent ridge hill residences was likely keep that means for several years, but that the bottom of the trough ended up reached of which the best out, was up. With all the market having stabilized at its new low, it meant how the glut of distressed properties that were being 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, explored 12 months has seen the signs and symptoms of recovery developing in sector sector, together 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 outlook on life. With economic forecasts being positive, albeit slow-moving, and costs being as low as they are, now is an excellent time to buy. As confidence returns to the economy, the opportunity of new letting agreements is booming and properties are much more beginning to move, bringing about a slow but steady rise in prices and rates. It can be forecast that this trend continues slowly but surely, depleting the supply surplus may eventually trigger a new bout of property development taking situation.

Current thinking is until this may well lead for industrial property boom in 2014/15. However with such a 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 should be in place before actual construction start to reside.

All within all this is already a very positive time for property development. Industrial property investors have every reason become cautiously optimistic, as it is definitely to medium term prospects are looking very positive, and this is the time to speculate and develop.