Market hindered by interest rates, economic stagnation

The commercial property market experienced a 5.6% decline in sales activity in the first quarter of 2023, compared with the same quarter in 2022, owing to numerous factors, including rising interest rates and the oversupply of office space, says property valuations custodian South African Institute of Valuers (SAIV) president Dianne de Wet. “I don’t think we’ve seen the full impact of the interest rate increases as this takes time to filter through and I believe that we may see another interest rate increase soon, even if it’s just a 25-basis point increase. There’s also the risk of the decline in vacancy rates being arrested,” notes De Wet.