The demand for certain properties rising

Picture: Thinkstock

Picture: Thinkstock

It would seem that as 2014 heads towards a close, some sectors of the property market are enjoying something of an upswing while others are lagging.

So says Jaco du Toit, who heads up Park Village Auctions’ (PVA) property division.

Says Du Toit: “Demand for residential property is on the increase, most notably in some of the country’s most affluent suburbs. This is telling, as high-end buyers are usually quite knowledgeable about property investment and tend only to act when conditions favour them.”

He adds that demand for buildings that can be converted into residential blocks are also currently in high demand in Johannesburg’s CBD, which potentially points to a shift towards high-density living.

Demand for commercial property on the other hand remains stubbornly weak amid challenging market conditions, which look set to remain for the rest of 2014 and the first quarter of 2015, notes Du Toit.

On the industrial and retail property front, he explains that property fundamentals are improving but cost containment in these sectors may prove problematic going forward, given rising labour, administrative and utility costs.

“It is interesting to see how the various sectors are performing,” notes Du Toit.

“It indicates where the money is, so to speak, and which sectors are falling behind. Of course successful investment in any type of property is reliant on location, property quality and the ability to generate a sustainable rental income or long-term return on investment and, while economic pressure, weak consumer confidence and difficulty securing finance remain key factors some sectors will take far longer to bounce back than others.”

In terms of property predictions for the first six months of 2015, Du Toit believes things will continue in much the same way unless some major “fireworks” take place in the economy.




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