Strong growth in office and industrial property demand provides a pointer to where the bold investor in residential property should put his money.
Gerhard Kotzé, CEO of the ERA South Africa property group, says that fundamentally, where non-residential property development takes place, residential property growth follows.
"The drivers behind commercial and industrial property development are well researched by investors and in many respects are identical to those that will ensure an accompanying healthy residential property market.
"In a softer market such as we now have, it's clearly important to be more selective, as with any other asset class. But there are bargains to be had and historically residential property has always delivered solid returns. Lower prices also mean less 'gearing' by the borrower to service a bond, while paradoxically, with fewer buyers around, rentals are rising, ensuring a better return on investment than even 18 months ago."
As for areas of choice, among the top 25 major office nodes of the country the latest research singles out Pretoria, Durban and Nelspruit for their sound commercial and industrial property markets, he says.
"Durban is reportedly doing particularly well in both the industrial and office markets with four of its seven office nodes among the top 25 in the country, according to property economists Rode & Associates.
"However the most surprising finding is the growth potential shown by Nelspruit.which comes out as the top-ranked office market in the country, implying a robust local economy accompanied by a strong residential market."
Gauteng is however far from losing out in the "best areas to invest in" stakes, says Kotzé. "The Knowledge Factory for example recently published the results of a survey to identify the top 10 residential suburbs in SA by highest volume of sales, highest value and highest average value and in Gauteng; Bryanston, Sandton, Morningside and Sandown come out well in terms of increases in value.
"Based on the best annual volume of sales, the Sowetan suburb of Protea Glen was the clear leader, followed by Cosmo City, and areas such as these have to be a serious consideration for the canny investor."
Issued by ERA South Africa