The Next Peak In South African Property Market

There is some good news for the South African property market if one takes a look at historical trends, according to Org Geldenhuys, managing director of property development and management company, Abacus Divisions.

This would suggest that the sector experiences a property boom every ten years and a constructions boom every 20 years.

“Although the next peak is at least another five years away there are some positive signs, including the fact that interest rates are expected to remain constant in 2013 and most of next year," he said.

"This will enable property owners – including in the commercial sector – to weather the storm a little bit easier.”

Geldenhuys said the South African property cycle peaked in the early 1980s and is currently feeling the back draft of the construction boom from 2001 – 2007.

“What landlords will be focusing on is the tighter management of their property portfolios with the goal of reducing vacancy levels," he said.

"They will try to sign tenants into reasonable long term contracts, offering a wider range of tenant benefits in the subdued market."

Some landlords are taking advantage of the lower interest rate climate to invest in the market, including in the refurbishing of properties.

He also pointed out that there appeared to be a resurgence and growth in the industrial property market, which might just move the SA property market into an upturn faster than normal cycles ordain.

Original Article