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The FNB Commercial Property Broker Survey for Q2 2024 has been released and the brokers feel the commercial property market is looking weaker compared to Q1.

But especially in Gauteng, which, when it comes to perception, ranks low for market sales activity while Cape Town is at the higher end of the spectrum.

Per The Citizen, property sector strategist at FNB Commercial Property Finance, John Loos noted how the findings of the survey show that the three metros in Gauteng have declined in business activity.

“In this report, we focus on the part of the survey where we ask respondents to rate their perception of the buying/selling market’s (not rental market) activity levels on a scale of one to 10, 10 being the strongest activity level rating,” adds Loos.

At the weak end of the six major metros in the area was Ekurhuleni (Greater Johannesburg), with the lowest retail activity rating of 3,52, the lowest office rating of 3,15, and the second lowest industrial rating of 5,52.

“Ekurhuleni is followed by Tshwane with Industrial Rating of 4,04, and office rating of 3,19 retail rating of 3,70 were second lowest only to City of Joburg, thus reflective of a Gauteng region that is perceived as weaker than the major coastal metros,” says Loos.

While these major metros show a decline, the City of Cape Town is perceived to have the strongest activity.

“City of Cape Town shows the highest ratings in two of the three major commercial property markets, 6,19 in the Retail Market, and 5,13 in the Office Market, while its solid 5,93 in its Industrial Market was second only to eThekwini’s 6,23 rating.”

The survey shows that investors have more confidence in the Western Cape because it’s generally seen as having better provincial and local governments than other parts of the country. Loos added that it has the additional advantage of “not having a ‘messy’ coalition government arrangement either at the city level or at broader Western Cape provincial level”.

Overall, broker business confidence remains relatively weak, which implies that a majority of 70% of respondents still perceive business conditions as unsatisfactory.

“It is possible that there is some lagged negative impact still feeding into the market from those earlier rate hikes,” he says.

Naturally, the elections also put investors in a bit of a limbo, with Loos noting some aspirant property investors were using the “wait-and-see” approach as the survey was completed shortly before the elections when everyone was still questioning who the ANC’s coalition partner in Government would be.