Cape price boom 'will continue'.

Posted On Monday, 10 February 2003 10:01 Published by
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Cape property to continue appreciating in value in the year ahead.

ANOTHER leader of the Cape property sector, Richard Edwards, head of commercial property finance at Nedbank Property and Asset Finance, has said that he now has the fullest confidence in the ability of Cape property to continue appreciating in value in the year ahead.

In August and September last year, said Edwards, he had begun to suspect that the residential market was approaching its peak - but, he said, it has continued to flourish despite the higher interest rates and the current boom is likely to continue for the foreseeable future - even if interest rates do not drop.

Edwards said three factors were fueling demand: foreign buyers, upgrading among previously disadvantaged groups and investors switching from the JSE to property. He said: 'Foreigners with strong world currencies are these days responsible for anything from 10% to 20% of the sales at the upper end of the market.

'Secondly at the lower end there is a strong desire among former residents of Mitchells Plain, Bonteheuwel, Elsies River and similar areas to move into more prestigious districts.

'Thirdly, and this is happening now with increasing frequency, the ordinary investor has moved into property, abandoning the JSE, unit trusts and overseas money markets in favour of a market which, he or she now believes, is more predictable and reliable.'

Office space in the Cape, said Edwards, is still over supplied and the situation will last well into 2003, with Claremont in particular probably finding it difficult to source takers for all its surplus space. However, the outlook for office landlords is a great deal more positive than it is for those in Gauteng and the over supply will not last longer than a year.

In the industrial market, he said, there are already signs that demand is picking up and will be stronger than it has been for some 10 years.

'There is a growing demand for the smaller industrial units, especially those in securitised parks.' Looking at the year ahead, Edwards said several forthcoming commercial projects financed by his division would keep Nedbank in the forefront of commercial property financiers.

'People still come to us first because we do have a reputation for understanding the needs and risks incurred by property developers,' said Edwards, 'and because we are geared to be flexible and give quick decisions. These factors will remain the same despite the organisational change.'

For further information, contact Richard Edwards on 021 480 5000.

Publisher: Weekend Argus
Source: Weekend Argus

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