Neil Gopal of the South African Property Owner’s Association chats to Cape Talk's Refilwe Moloto about the impact the GDP decline is likely to have on the country's commercial property market.
Last month GDP slumped by 3.2% to its lowest in ten years.
Gopal says without GDP growth, building rates decline because no new businesses are being established.
It all has a knock on effect. There's a strong correlation between GDP growth and the demand for space.— Neil Gopal, CEO - South African Property Owner’s Association
Gopal says increases in rates and taxes are eating into landlords rentals.
We've got some situations where tenants are paying higher property rates and taxes than actual rental.— Neil Gopal, CEO - South African Property Owner’s Association
Rates and taxes and electricity have gone up by 25% annually over the last couple of years and that eats into rentals and makes those kind of investments less and less desirable.— Neil Gopal, CEO - South African Property Owner’s Association
Listen to the full interview below:
This article first appeared on CapeTalk : Commercial property sector takes hit as GDP declines