Well we won the rugby and we got a percentage decrease in the prime lending rate – not a bad week.
What I have recently seen in the commercial and industrial market, is that the commercial property market appears to be at the top of the curve. The number of vacant properties has increased marginally and it is easier to obtain space in good demand areas, where previously, space was as rare as hen’s teeth. It looks as if the land lords don’t want to sell and are holding on in the hope of getting a long term tenant to bridge the possible upcoming down turn. The land lords will accept a lower rental with a longer lease.
The cap rates are also under pressure and this would indicate that the commercial sector is now coming to the end of a long positive period which was driven by a strong economy, strong demand for space and space that was also expensive to build.
Research has shown that in some areas the asking rate per square meter has dropped by as much as R10 per square meter since January, with the number of properties available for sale increasing.
The residential housing market does not have much activity when compared to the boom times of two years ago. The banks are reporting various stats such as 86% of properties sold, sell below the asking price. A bond originators report that 57% of bond applications are declined and that the banks are requiring around 21% deposit on an average residential transaction. Some estate agents report that a property has to be on the market for longer than 17 weeks to sell and the estate agents also believe that the Banks’ lending criteria have become too strict. Add to this, rumblings from Tito about the Banks’ lending policy and I am sure we are in for some interesting times ahead in the residential property market.
What I have recently seen in the commercial and industrial market, is that the commercial property market appears to be at the top of the curve. The number of vacant properties has increased marginally and it is easier to obtain space in good demand areas, where previously, space was as rare as hen’s teeth. It looks as if the land lords don’t want to sell and are holding on in the hope of getting a long term tenant to bridge the possible upcoming down turn. The land lords will accept a lower rental with a longer lease.
The cap rates are also under pressure and this would indicate that the commercial sector is now coming to the end of a long positive period which was driven by a strong economy, strong demand for space and space that was also expensive to build.
Research has shown that in some areas the asking rate per square meter has dropped by as much as R10 per square meter since January, with the number of properties available for sale increasing.
The residential housing market does not have much activity when compared to the boom times of two years ago. The banks are reporting various stats such as 86% of properties sold, sell below the asking price. A bond originators report that 57% of bond applications are declined and that the banks are requiring around 21% deposit on an average residential transaction. Some estate agents report that a property has to be on the market for longer than 17 weeks to sell and the estate agents also believe that the Banks’ lending criteria have become too strict. Add to this, rumblings from Tito about the Banks’ lending policy and I am sure we are in for some interesting times ahead in the residential property market.
If you have any comment please contact me on Brian@c2csa.co.za
