South African property market recovery being hampered
The property market in South Africa has not been hit as hard as some other international real estate sectors but power shortages and lack of liquidity are hampering recovery, it is claimed.
The commercial sector in cities like Cape Town and Johannesburg shows promise with several substantial office developments due for completion in 2011, according to Colliers International.
'This sector remains the most important property business in the city,' said Sanett Uys, director at Colliers International Property and Facilities Management.
'The South African property market was not hit as hard as some of the other international markets, but a number of factors are going to inhibit a turnaround until 2010,' said Uys.
The main problem is ongoing power shortages followed by weak household demand, lack of liquidity and the global downturn.
'Our property market's exposure to foreign investment is limited, liquidity is restricted since South African banks don't lend easily, and our property fundamentals are still strong,' added Uys.
Colliers believes 2009 will be an interesting year, with the economic downturn continuing to impact on the property market. Overall economists are predicting a turnaround in 2010 with economic growth bouncing back to 5.3%.
And according to some reports there are areas of the country that are doing well even in the current climate. Certain suburbs and certain types of real estate continue to sell well, according to agents.
In the Western Cape, for example, high end properties and iconic real estate are defying downward market trends. 'Some areas have been hard hit,' said Laurie Wener, managing director of Pam Golding Properties. She advises sellers in these areas to try to hold on and rent out their properties until the market recovers rather than sell now at a loss.
Article from: www.propertywire.com