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Sep 25, 2007:
Nedbank Corporate Property Finance (Cape) has raised its loan book total to R11bn.
The new record level is 21% up on this time last year and 35% up on August 2005. Annualised growth for the last year has been over 25%.
Richard Edwards, manager: new business for Nedbank Corporate Property Finance (Cape), said the loan book reflects accurately the changes taking place in Cape property development.
"Two years ago 70% of our new investments were in residential property developments. Today these account for only 30% of the new business loan book and we think that the National Credit Act (NCA), plenty of stock and recent interest rate increases will restrict new residential projects for a while, although certain pockets in the residential market are still strong, especially in the affordable housing area and in houses or units priced up to R1m.
"The major cities (Cape Town, Johannesburg and Durban) have all seen large-scale development over the past five years. Now lower demand, high land prices and scarcity of land means that many developers and property investors are turning their attention to some of the smaller metropoles where the same set of circumstances are not yet in play.
"The swing in the last 18 months has been to retail, commercial and industrial work. Retail, we believe, is now approaching a peak but the commercial market has a long way to run and industrial development, although kept back by high land prices and land shortages, is still looking very promising."
Looking ahead, Edwards said that a further growth in the Nedbank Cape property loan book is possible by the year-end.
