WITH residential development booming in the Western Cape, how does the area's largest property financier, Nedbank Property and Asset Finance, view the coming 10 months?

Peter Smith, the regional executive for Nedbank Property and Assets Finance, said there were now indications that although there would definitely not be the catastrophic fallout predicted by some, a slow-down is likely, especially in certain "hot areas" where large numbers of middle and top range housing have been brought on stream in the last three years.

Conversely, said Smith, any infill project launched in the already inhabited areas would be likely to succeed, as would any project linked to good lifestyle facilities - like those in Kloof Street, Gardens, or the De Waterkant boulevarding area.

Under the circumstances, said Smith, Nedbank would still examine every residential project proposal that came across its desk, but may this year favour the developers with whom they have long associations.

They would also, he said, take a closer, more critical look at pre-launch sales, checking that these were not just "hopefuls", and that multi-unit purchases by two or three investors do not comprise too large a proportion of the sales.

"While this is always a sign of confidence in the developer, we would usually prefer a scheme with a high level of owner-occupier buyers rather than investors," he said.

"We will also be encouraging developers to insist on larger deposits to deter the hit-and-miss investor who is prepared to walk away from his bond if things don't go to plan."

The question not yet clearly answered, said Smith, was how much of the boom was a much needed catch-up that was bound to take place when interest rates dropped and how much was possibly oversupply, relying on sales hype to get rid of the units.

"The take-up rates of Cape residential property have never been as satisfactorily analysed as we would like," he said