Wayne Berger of Instant Property shares his insight into trends in the property industry.
There are several negative influences impacting on the fluidity and success of the property market at the moment. These include: South Africa’s junk status, political uncertainty, heavy manufacturing considerations due to labour issues and a lack of skilled labour.
As a result, many organisations within this sector are adopting a Wait and see attitude. This can be seen from the investor level to the tenants as uncertainty impacts on business decisions. Banks are also being cautious with lending and this is stagnating industry activity. That said, there’s a saying that in tough economic climates,
There are still resilient areas that may not be as affected by these negative influences, for example, Cape Town is not as affected as Johannesburg, and this type of differential also filters down into specific suburbs. For the tenant, this means that the landlord will be more desperate to fill their vacancies and willing to negotiate. You will be empowered and can shop around.
For the property investor, many landlords may feel pressure to sell assets so if you are capital flush in these markets there are bargains to be found, especially if you research correctly and don’t buy hastily. The rule of thumb for the property auction is that in tough times there are bargains, but in bullish times the price tag is at a premium.
- Wayne Berger is the Managing Partner at iShack Ventures, which includes Instant Property in their portfolio. www.instantproperty.co.za