Atlantic seaboard prices tipped to gain from World Cup
Intro Property prices along Cape Town's Atlantic seaboard are expected to
increase dramatically in the two years prior to the 2010 Soccer World
Cup
Property prices along Cape Town's Atlantic seaboard are expected to increase
dramatically in the two years prior to the 2010 Soccer World Cup, says
Steven Delit, of ReMax Living on the Atlantic seaboard.
Delit says this trend will be driven by the people coming to SA to work
on the World Cup infrastructure.
"The property market is really driven by people who will be here
before the event. The personnel for the infrastructure of the tournament
start coming to SA and they are given a rental allowance."
"After two or three months they will see the rental allowances can
go towards a bond and they will be buying and driving up the prices. We
will also have a big growth in rental prices because these overseas people
will be paid in their foreign currency and our rental prices are at least
half of what they would be paying overseas," says Delit.
Delit says the Atlantic seaboard "starts the trends in property in
SA" and that the same growth principle will apply to other areas
in SA.
Other areas might not have the same growth as the Atlantic seaboard but
they will also show price increases.
Delit says ReMax has researched various property markets around the world,
focusing on what happened before and after hosting a world sporting event,
and this price growth trend occurred in all of them.
ReMax also looked at the effects of the 2003 Cricket World Cup, which
was hosted in SA.
"We found that in the years directly before the event, the property
price growth accelerates and then increases at a slower rate in the two
years after the event, and then increases dramatically after that two-year
period."
ReMax Living believes that along the Atlantic seaboard, median residential
property price growth will increase about 25% each year in the two years
before the 2010 World Cup.
In 2010 and 2011, the market would see median growth of 15% and in 2012
about 30%.
After the sporting event is held, some of the infrastructure personnel
may want to sell and this creates an oversupply of property, and reduces
the prices increases in the two years after the sporting event.
In 2012, the visitors who visited SA in 2010 will start coming back as
tourists and start showing an interest in buying, says Delit.
He says these same trends applied to other events such as the Atlanta
Olympics, the recent World Cup in Germany and the Sydney Olympics.
But property economist Francois Viruly, of Viruly Consulting, says the
expected property price increases would be more a function of a rise in
building costs caused by the infrastructure projects surrounding the World
Cup event.
Viruly says that certain locations, such as Ellis Park, will benefit significantly
from the infrastructure expenditure.
By Nick WILSON. ,
14 Dec 2006.
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