Are we at the bottom of the property cycle? Has the upturn started? “The residential and commercial property clocks correspond but the commercial market is usually 6 months to a year behind the residential cycle” says Guy de la Porte, a commercial property specialist in Cape Town, South Africa.
Property cycles also differ from country to country and whilst they are influenced by interest rates, the long term trends are influenced by population growth, demographics and the supply and demand equation.
“I recall meeting Lew Geffen at a Savile Row property auction in Cape Town in November last year. Lew is the president of the Sotheby’s property organization in South Africa and a doyen in the market. He declared the recession over for residential property, having seen large increases in sales volumes in the fourth quarter last year”.
“If Lew is correct and he almost always is, then the commercial property cycle should be set to turn mid 2010 to the end of 2010″.
Guy de la Porte believes that if commercial property has not already bottomed out yet, a turn around is not too far off. “Events in Europe that bring sovereign debt into question could knock the property clock right off the wall, however, I personally feel cautiously confident of a slow recovery in South African commercial property, starting any time from now, to early next year”.
Property Clock
