The slowdown of the industrial property market has started to take effect and yields on industrial property investments have started to rise.

The first quarter of 2014 saw nominal year-on-year growth in the average value of homes.

The decision by the Monetary Policy Committee to increase interest rates may be unfortunate for the commercial property sector.

The Reserve Bank has hiked up the repo rate to 5.5%.

South Africa’s listed property sector can expect another interesting year in 2014 according to Redefine Properties CEO Marc Wainer, who predicts interest rates will be one of the most important underlying forces for the sector.

Listed property sector should be able to perform better next year than it did this year, even with the threat of interest rates rising.

While inflationary concerns appear in the main to be contained at present, further stimulus for the South African economy in terms of a rate cut would have been a welcome move

Though binding supply constraints (electricity, credit access, public sector manpower) and poor export dynamics explain much of South Africa’s 2.5% subpar growth performance during 2012-2013, there is enough of a business confidence restraint to also keep demand back.

With the global credit crisis and the continuation of sovereign bail-outs, it appears that uncertainty remains the only certainty. And coupled to low economic  growth, global interest rates are set to remain at historic low levels for longer than was thought perhaps only a few weeks ago. Similarly for SA, we can expect the low interest rate cycle to ride for a little longer which is ultimately good for direct and listed property. Pointing to mortgage advaces, some are suggesting that rates will in fact come down further

One couldn’t possibly be too careful. Three years into recovery and the European crisis hanging over us like a Sword of Damocles, with media reports this month of bankers calling the bottom of their credit impairment cycle as their book growth is starting to create renewed increases in portfolio provisions, some are looking out for the next recession while others may just want to turn cautious naturally.