SA Property Market Recovery Being Hampered

PropertyWire, a premier global property news service, reports that South Africa has not been hit as hard as some international real estate sectors but there are factors that are hampering the recovery of the property market.

Although the residential market is going through a tough patch, the commercial sector in cities like Cape Town and Johannesburg shows promise, with several office developments due for completion in 2011. This is according to Colliers International Property that also says that the commercial sector remains the most important property business in the cities.

Sanett Uys, director of Colliers International Property and Facilities Management says that the South African property market was not hit as hard as some of the other international markets, but a number of factors, like the shortage of power followed by weak household demand, the lack of liquidity and the global downturn, are going to inhibit a turnaround until 2010.

Uys added that the property market’s exposure to foreign investment is limited, liquidity is restricted since the banks are not eager to lend and property fundamentals are still strong.

According to Colliers, 2009 might be an interesting one with the economic slowdown continuing to impact the property market. However, economists are predicting a turnaround in 2010 with economic growth bouncing back to 5.3%.

Although some areas have been hit hard by the downward market trends, experts are urging seller in these areas to try and hold on to their properties until the market recovers rather than to sell now at a loss.

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