South Africa property market 'struggling to recover'

South Africa's property market is struggling to recover from the economic downturn, despite not being hit as badly as some other international real estate sectors, a new report has revealed.

According to Colliers International, issues such as power outages, the lack of liquidity and weak household demand are limiting the growth of the property market in the country.

However, the real estate services firm noted that exposure to foreign investment has been limited, meaning the fundamentals of the market are still "strong" and that the sector will improve in 2010.

"Colliers believes that 2009 will be a very interesting year," the firm said in its report.

"Capitalisation rates should continue to soften as sellers start to realise the true market value of their properties," the company added.

Earlier this year the Association of Independent Tour Operators concluded that South Africa is one of the most popular destinations for long-haul holidaymakers, something that may be welcomed by investors considering purchasing property in the country.

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