select
|

Property investor trends

Absa bank head of lending, Michael Mortimer, says the forecast in the commercial property sector is looking better in June 2012 compared with a year ago.

Pieter Steyn, Absa’s head of commercial property finance (CPF) says the bank is viewing the remainder of 2012 for the sector with renewed optimism “while treading cautiously” amid expectations of continued upside inflation in the year ahead.

Absa’s property analyst Jacques du Toit and his colleagues maintain housing affordability will remain key in the year ahead on the back of low house price growth and low interest rates. Du Toit says while disposable income is growing, many households are unable to benefit from this because of the state of their finances and credit records.

In this regard, he says smaller and higher density properties, like flats and townhouses are the future of housing in South Africa. This is especially true in major metropolitan areas partly because of the availability and cost of serviced vacant land for development, the affordability of housing and housing finance, operating and transport-related costs.

Another area in which growth is expected is in townships where some developers have already made inroads. The question has often been asked why developers are not moving into these nodes by establishing office and industrial space. In Soweto, south west of Johannesburg for example, tens-of-thousands of workers commute to the Johannesburg CBD and surrounding suburbs daily. Strikes and industrial action often paralyse workers trying to get to work, costing the economy millions.

Du Toit says this sector shows significant potential.

Another market which is promising is Africa. Steyn says: “While property development and investment on the boarder African continent does pose numerous challenges of its own there are undoubted opportunities as well, and we are committed to supporting our clients with their African expansion plans.”

Steyn says Absa is particularly well positioned to do so through its Barclays footprint across the continent.



Steyn says given the relatively new retail development offerings currently available in South Africa, many developers are looking at the rest of Africa.

He says the office sector remains the most challenged of all the property sectors. “With national vacancies having increased for four successive quarters and now breaching 10%, the sector remains under pressure in various nodes.”

Steyn adds that inflationary pressures and the possible movement towards higher interest rates are expected to result in a slowdown in buying for this year compared to 2011.

Du Toit adds that interest rates are at their lowest level in more than 35 years and are likely to remain unchanged until late 2012. This will be on the back of global economic uncertainties and their possible impact on the domestic economy and consumer sector.

“Interest rates are expected to be on a gradual rising trend from late 2012 up to late 2013,” Du Toit said.

(Article sourced: Moneyweb)




  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 19 Jan 2018
      Extending from Randfontein in the west to Roodepoort in the east and including the towns of Krugersdorp and Magaliesburg, the West Rand has a plethora of property available to residents who choose to make this unique area their home.
    • 19 Jan 2018
      When it comes to financial planning, doing the work to ensure you’re prepared for unexpected emergencies is just as important as ticking off your other goals and New Year’s resolutions. The beginning of the year is also the perfect time to review your various insurance policies.
    • 19 Jan 2018
      No surprises at the first Monetary Policy Committee of 2018, as Reserve Bank Governor, Lesetja Kganyago, announced that the interest rates would stay at their current levels.
    • 18 Jan 2018
      The Southern Suburbs make up some of the most popular residential areas in Cape Town, comprising charming groups of suburbs which lie to the south-east of the slopes of Table Mountain. It is seen as the city's most expensive residential neighbourhoods with a choice of various private schools, upmarket eateries, wine estates, beautiful homes and trendy apartments.
    • 18 Jan 2018
      New year, new goals! If you’ve resolved to purchase your first property in 2018, then this 6-step guide from the Rawson Property Group is a must-read. It will help you navigate and simplify what is often be seen as a confusing process of buying your first home – right from the house-hunt to the house-warming.
    • 17 Jan 2018
      While the current property market may still favour buyers, it doesn’t mean that they shouldn’t be well prepared before putting in an offer to purchase.
    • 17 Jan 2018
      Lightstone lists Blair Atholl as the most expensive suburb with an average house price of R11.2 million, followed by Westcliff (R10.5 million), Dunkeld (R9.3 million), Sandhurst (R9.1 million) and Inanda (R7.2 million).
    • 17 Jan 2018
      As it currently stands, there are four main ways in which a home can be bought in South Africa, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who adds that deciding in which legal entity to purchase the property is not a decision that should be entered into lightly, as each has its pros and cons.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK