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South Africa Real Estate Report Q2 2010 - New Market Report Published

South Africa was plunged into recession by the global financial crisis, which in turn, affected the property market. Despite the effects of the economic turmoil round the world, South Africa's banking sector has remained stable. The nation remains the African continent's financial hub. South Africa's close trading ties with Europe gives the nation the opportunity to serve as a manufacturing and export hub for both European and Asian markets.

South Africa's first home buyers market remains difficult to break into but while residential prices have fallen sharply in South Africa in recent years, there are signs that the residential market has hit its bottom and, indeed, some improvement in prices is now taking place.

Commercial property in good locations is in demand and according to CB Richard Ellis further developments will be limited. Industrial space has relatively low vacancies and, according to Redefine, whose portfolio vacancy level is below 5%, with the economy now improving, demand here is likely to increase.

In 2010, South Africa will become the first African nation to host the World Cup. The government has increased spending on the 2010 World Cup as the global financial crisis and subsequent global economic downturn affected preparations. The South African government also remains committed to improving infrastructure, including expenditure on public transport, roads and rail networks, school buildings, clinics and other provincial infrastructure projects, municipal infrastructure and bulk water systems. A major focus is the programme of low-cost social housing in an attempt to improve the quality of the country's housing stock and raise living conditions.

Threats in the construction industry exist as power availability continues to be an issue for new developments. It is also possible the upswing in the construction industry, combined with a growing shortage of skilled labour could inflate construction costs and hamper completion of developments. Currently, high unemployment means that wage rates are comparatively low.

South Africa Real Estate Report Q2 2010:
http://www.companiesandmarkets.com/r.ashx?id=N1I3HKVY1278191&prk=55177551d0aed2e352e3a58b3ac4223b

Article from: www.officialwire.com