It appears estate agents and house investors and other stakeholders in the housing market have experienced serious anguish and denial following the launch of Rode’s Report (quarter 4 of 2011) on 26 January 2012. At the press conference at FNB’s offices in Fairland, Johannesburg, I stated that houses were fundamentally overvalued by at least 25%; furthermore, that house prices will, as a consequence, decline in real terms over many years (unless one assumes a quick collapse like in the USA).
Disappointing for the demand prospects of industrial property must have been the recent moderation in economic activity.
Despite sales of cement showing growth again, for the building industry there is still no light at the end of the tunnel.
For now, no improvement in the demand for office space is detectable, this according to the latest issue of Rode’s Report on the State of the South African Property Market (2011:3).
For now, no improvement in the demand for office space is detectable, with vacancy rates in general continuing to move sideways.
Despite still showing mediocre growth — below consumer inflation — flat rentals are at least outperforming house and townhouse rentals.
For now, near-term prospects for the beleaguered housing market remain bleak; this as weaknesses in the residential mortgage market are likely to persist.
Dark clouds remain fixed over the building-construction industry as non-residential building activity is now also contracting.
Industrial property is showing signs of a recovery with vacancy rates seemingly levelling off and rentals once again showing growth.
The take-up of office space remains feeble for now, explaining why vacancy rates are still stubbornly refusing to drop.