Blog categorized as News

Dark clouds remain fixed over the building-construction industry as non-residential building activity is now also contracting.

Industrial property is showing signs of a recovery with vacancy rates seemingly levelling off and rentals once again showing growth.

The take-up of office space remains feeble for now, explaining why vacancy rates are still stubbornly refusing to drop.

March 30, 2011; Johannesburg: First National Bank and property consultants Rode and Associates today launched a report on the country’s property market that shows a gradual return of cautious optimism in the office and industrial sectors of the property market.

Despite still drifting lower, industrial rentals in the major conurbations managed to end 2010 on a better note.

No help for the ailing house market can, for now, be expected from lower interest rates.

According to the latest Rode’s Report on the SA Property Market (quarter 2010:4); office rentals were able to muster some growth, even against the headwinds of a slowing economy.

Disappointing, although not entirely unexpected, was the waning in overall economic growth in the third quarter of 2010.

It is easy to understand why building activity tends to track house prices. It has to do with demand and supply, and the profit margin of developers.

The latest Rode’s Report on the SA Property Market reveals that the upward march of office vacancies is seemingly losing momentum. This, says editor John Lottering, holds out hope for office landlords that market rentals will soon stabilise.

Great news for the Port Elizabeth industrial property market has been the resurgence, from the ashes, of new-vehicle sales.

After showing the strains of weak economic activity for a number of quarters, office vacancies in both the decentralized and CBD markets are seemingly levelling off.

A look at industrial vacancy trends shows that there is, as yet, no need for industrial property investors to panic and make friends with their bankers.

The property markets across the board are still in hibernation mode, according to the latest Rode’s Report on the State of the Property Market.

Some cause for optimism for shopping-centre landlords has been the recovery in retail sales volumes over the past few months.

The effect of the economic downturn on market rentals has now become strikingly evident.

Overall, the growth in market rentals for office space is still weak. According to the latest Rode’s Report on the SA Property Market, this is especially evident in Cape Town (6%) and Johannesburg (4%) decentralized, where rentals were, on average, lower than what they were a year ago.

The effects of softer economic activity on the demand for industrial space to rent, and consequently market rentals, are becoming strikingly evident.

In spite of the technical emergence of the economy out of the recession, the latest Rode’s Report on the Property Market (quarter 2009:4) reveals that rental markets in particular continue to feel the pinch of weak economic conditions across the commercial, industrial and residential arenas.

While property’s PR machine may have started talking about green shoots appearing, the facts reveal that the brakes − in terms of the growth in market rentals − are being applied more firmly now. This is according to data revealed in the latest Rode’s Report on the SA Property Market.