Property News Around The World

Category News

South Africa

The last few weeks has seen the typical strike cycle that materialises every year around this time with some unions demanding nearly 3x times the inflation rate as a minimum wage.  Quite amazing in a country with a 25% unemployment rate!

This has been followed by Juju Malema's disciplinary hearing at Luthuli House backed by a couple of thousand unemployed youth bussed in to support his loquacious ramblings about claiming the right to JSE shares  Perhaps someone would like to write a book called "How to build an Economy and influence Investors".

International

The United States has borrowed a further 3 trillion dollars to pay their way out of a credit squeeze and had the audacity to critisize Standard and Poor's downgrading of their sovereign rating from AAA to AA+.  Greece is at the bottom of the rating scale and will almost certainly default on its debt, with Italy, Spain, Portugal and Cyprus in a close race to stave off the same result.

Common to them all is high unemployment and rigid banks who truthfully don't know what to do and so do nothing to stimulate their economies that will avoid double dip recession.
Where does this all lead and what effect does all of this have on the South African property market, and specifically on the Industrial property market which is our focus of business?

In research conducted by Auction Alliance their findings were that demand for Industrial property seemed to be stable with rising industrial rentals and Investor demand in the 1st quarter of 2011, which showed a marked increase over the same period of 2010.

In August 2011, listed property posted higher returns than the JSE all share index achieving an overall monthly return of 2,6% and far outpacing inflation.

Whilst these indications are positive there is still significant risk aversion to the emerging markets as signified by the weakening rand slipping to its lowest level in September 2011 since July 2010.  Furthermore manufacturing business confidence dropped in the third quarter of this year with growth in domestic sales and order volumes declining sharply according to the Bureau for Economic research.

This is a roller coaster in which no one knows the outcome or which way  to turn so perhaps the old adage of  "Caution is the better part of Valour" is applicable to the current market.