Global sporting events
impact on SA property prices
Press Release issued by
Lange Public Relations
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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.
“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.
“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%.” |
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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. 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.
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| “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. “ |
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“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.”
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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About MortgageSA
– South Africa’s Top Non Listed Company 2004
MortgageSA
pioneered home loan origination in South Africa by re-engineering the home
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information, go to www.mortgagesa.com
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