| Global
sporting events impact on SA property prices |
| Press Release
issued |
| Much has been
said about the positive sentiment towards South African property created
by winning the right to host the 2010 world cup; now an analysis of major
global sporting events has put some numbers to the hype. Speaking at the
launch of SOLD, a new magazine for estate agents published by MortgageSA,
Managing Director Saul Geffen says, “We can get an idea of what is likely
to happen to our property prices if we analyse major global sports events
like previous soccer world cups and the Olympics.
“For example,
Paris property prices escalated by as much as 55% over a one-year period
before and after the 2002 World Cup and properties across the city made
astronomical gains with apartments close to some of the stadia rocketing
by over 100% over the same period. |
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“And certain
neglected neighbourhoods burst back to life too. We expect the same sort
of phenomena will happen in SA despite the market’s good run, as our property
is still undervalued in global terms and the long-term macroeconomic outlook
is very stable and favourable.”
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Geffen notes
that hosting an Olympic Games or World Cup encourages city regeneration
and is usually accompanied by an improvement in facilities and transport
links. |
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| “Property
prices in Athens, Sydney, Atlanta, and Barcelona, all got a kicker as new
transport and sporting facilities spurred regeneration plans and pushed
them ahead of rival cities. On average, these four Olympic cities outperformed
the national market by 19 percentage points in the five years leading up
to the games, but in Barcelona the impact was even greater. Prices
there raced ahead by 131% compared with 83% nationally to open up a 49%
price gap over other Spanish cities. In Sydney the differential was 11%,
in Athens 9%, and in Atlanta 6%.”
Geffen says
that even the less prestigious Commonwealth Games in Manchester in 2002
provides another yardstick for South Africa’s potential.
In the five
years leading up to the 2002 Commonwealth Games, house prices in central
Manchester rose by 102%, compared with a 52% rise in prices in the North
West and an 83% increase across the UK. |
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| Geffen points
out though that although there is much speculation on just how much prices
will rise, urban upliftment and positive social impact is what really counts
so that all South Africans benefit from this event.
“Well planned
government expenditure aimed at local regeneration will give impetus to
host cities in creating a more suitable and attractive inner-city environment
– that’s because public infrastructure that would otherwise have taken
years to complete due to bureaucratic red tape will now be fast-tracked.
For instance, prior to the 1995 Rugby World Cup, Johannesburg International
Airport was severely under funded, today it’s world class. The R7-billion
Gautrain high-speed service between Johannesburg and Pretoria will certainly
be completed in time for the 2010 World Cup, creating a wealth corridor
and increased property values across both cities.“
“Other projects
that stand to benefit from the event include Coega’s giant ‘signature bridge’,
the Statue of Freedom in Port Elizabeth and Durban’s new international
airport at La Mercy, North of Durban. All of these will be fast-tracked
into reality by 2010.” |
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| Geffen points
to the R2-billion Greater Ellis Park Precinct Project as one of the shining
examples of the positive impact the event will have.
“It will see
the business, commercial and light industrial areas of surrounding Doornfontein,
New Doornfontein, Troyeville and Lorentzville being given a welcome facelift.
Property owners in these neglected suburbs, as well as nearby suburbs like
Bez Valley, Judith’s Paarl and Bertrams, stand to gain significantly.
“Of course
it’s not just the run up to the world cup that’s important, it’s that South
Africa and its spectacular properties, people and lifestyle will be permanently
etched on the minds of TV viewers and visitors alike and will establish
us one of the best places on earth to buy property.”
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