Potential of Property Investment in 2010

January 4 - The Group Chairman for Plexus, Dr. Preiur du Plessis, examined the financial options for this year and showed that property may be a good source of income for investors.

Du Plessis said that 2009 ended with strong indications that the emergency measures put out by central banks were successful, shown by the fact that most financial institutions survived.

With evidence that global economies are moving out of the recession, emerging markets have delivered excellent returns for those who are willing to take nominal risks and invest in these markets.

Property is one area where things look promising, as it offers the potential for capital growth, as well as the potential for a steady stream of income with growing rental rates.

Du Plessis predicts that as property prices continue to recover in South Africa and economic growth improves, the investment potential of listed property should continue to improve as well.

Rental income should also improve on the commercial property front, as vacancy rates decline.

As such, investors should heed du Plessis's advice: To buy into listed property in a moderate way instead of investing in what he terms "low yielding interest bearing instruments in an income generating investment."

As the property market improves, it is expected that banks will continue to loosen their tough lending criteria, allowing for potential investors to take out home loans in a way that is much easier than in previous years.

This, in turn, will stimulate competition among banks, leading to better rates for investors across the board.

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1/4/2010 9:08:39 AM