FNB's Q3 2024 Property Broker Survey highlights a sharp rise in optimism about the future of sales activity within the commercial property market in South Africa, as concerns over a weak economy and political uncertainty have notably eased.
In the office property sector, which saw a strong increase in the positive expectation index, brokers highlighted a shortage of stock, particularly in smaller office spaces.
While FNB acknowledges these shortages, it suggests they are specific to certain types and locations of office space, as other brokers still report the market is oversupplied relative to demand.
The industrial property market, on the other hand, posted the weakest expectations index. Brokers also cited stock shortages, with a small portion pointing to limited availability in smaller spaces.
In the retail property market, brokers' near-term activity expectations remain influenced by lingering economic and political uncertainty.
However, there has been a notable rise in positive business sentiment, with 24% of brokers now reporting optimism compared to just 12.2% in Q2.
Across all three markets—office, industrial, and retail—41% of brokers mentioned stock issues, with some indicating a general 'lack of supply.'
John Loos, Senior Economist at FNB Commercial Property Finance, noted that brokers are seeing improved business confidence, potentially driven by expectations of a more business-friendly outcome in the upcoming elections and anticipated interest rate cuts. However, this optimism has not yet translated into a significant uptick in sales activity.
The FNB Commercial Property Broker Survey examines a sample of commercial property brokers operating in South Africa's six major metros: City of Johannesburg and Ekurhuleni (Greater Johannesburg), Tshwane, eThekwini, City of Cape Town, and Nelson Mandela Bay.
Broker confidence has notably increased in the third quarter of 2024. "Before assessing activity level perceptions, we ask all respondents whether they find current business conditions 'satisfactory' in a simple 'yes or no' format," explained Loos.
“In Q3 2024, the percentage of respondents reporting satisfactory conditions saw a significant rise, jumping from 30% in the previous quarter to 44%.”
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