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The economic Property Development Market – From Bust to Boom

Historically the real estate 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 coupled with general economic situation. But with the signs of economic recovery beginning to adopt hold again, what prospects are there for a resurgence in the industrial property store?

When industrial and commercial property prices reached another low, it signaled 2 things. Firstly that the market was severely depressed and was likely to stay that way for several years, but that the bottom of the trough are already reached of which the very best out, was up. Is not market having stabilized at its new low, it meant that the glut of distressed properties that were being pouring in had stopped, and that isn't 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 going on 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 certainly one of the current optimistic outlook. With economic forecasts being positive, albeit slow-moving, and kent ridge hill residence prices being as low as they are, now constitutes a time invest in. As confidence returns to the economy, the chance of new letting agreements is booming and properties are much more beginning to move, creating a slow but steady rise in prices and rates. Usually forecast this kind of trend continues slowly but surely, depleting the supply surplus may eventually trigger a new bout of property development taking place.

Current thinking is this specific may well lead with regard to an industrial property boom in 2014/15. Not surprisingly with this long gestation period a great deal of developments to go to final fruition, the process needs to be kicked off now. Feasibility studies, surveys, finance - all of these things end up being in place before actual construction starting to show up.

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