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Winners take all in South Africa
The punters are yet to identify the form teams for the upcoming soccer extravaganza that will be played out on the fields of South Africa. But for those tracking real estate, the lead up to the 2010 World Cup bodes nothing but good news for the country's property market.
Currency market specialist Duncan Higgins of Caxton FX says that the South African rand a high risk, yet high yielding currency has obvious attractions for investors looking for maximum gains. And he expects South Africa's economic position to strengthen in the run up to next summer when the World Cup kicks off.
"Investment will be flooding into the country and it looks strong for this year," he says. "The South African economy will face no real pressure until after the World Cup."
For sure, buying back in their country of origin has obvious appeal for the many South Africans living and working in the UAE, but is now the right time to do so?
With a projected R30 billion (about Dh14.7 billion) worth of investments expected to flow into the country, along with the influx of an expected half million visitors, property pundits expect the market to undergo a serious boom. From 2000 to 2007, the country experienced unparalleled gains with average price gains of 20 per cent, peaking in 2004 at 35.7 per cent year-on-year growth.
However, since 2007 prices have dipped, with the Absa Group, South Africa's biggest mortgage lender, reporting the country's biggest ever fall in 23 years in July 2009.
The coming summer's events are hoped to reverse the slide. A recent visit reveals a destination determined to improve its image, infrastructure and widen its appeal to the global market.
The country recently hosted several other sporting events such as the Fifa Confederations Cup and two cricketing attractions, the 2008 India Premier League and 2009 ICC Champions Trophy, both rescheduled at the last minute to South Africa. Each event brought with it improvements to the country's infrastructure along with a favourable impact on tourism. The number of visitor were up 7.3 per cent during 2009, which itself comes on the back of a record turnout in 2008 when over 9.3 million tourists visited South Africa.
Given such figures, speculation is rife that rental yields will be higher than ever this summer. The World Cup organisers, Fifa, are already reserving additional accommodation in neighbouring countries and considering using cruise liners off the South African shoreline to accommodate fans and the media.
Fifa's general secretary Jérôme Valcke sees the World Cup as not only a challenge, but an opportunity in itself. "Everyone will come out as a winner, not only FIFA," says Valcke.
"The country will be lifted to a new level and this is a requirement for us." One developer, The Zorgvliet Group, is hoping to capitalise with its authentic South African lodge-style property developments in locations near two of the World Cup stadia, and around three and a half hours drive from Johannesburg, the economic hub of South Africa.
Mac van der Merwe, CEO, has spent years buying up several farms in the Limpopo region and has created the area's second largest game reserve.
He has now built a select number of contemporary-styled properties for people who appreciate nature and wildlife, but is keen to dissuade speculators.
"We're in it for the long-term and do not encourage pure speculation whereby people will sell on quickly for profit," he adds. "These buyers must appreciate nature."
One of Van der Merwe's creations is the Dinkweng Safari Camp & Spa in the Limpopo province. Owners can enjoy luxury lodging in the bush in the safety of a contemporary home, which is just a 60-minute drive from the Peter Mokaba Sports Complex in Polokwane.
Eleven detached houses with thatched roofs perch high on a ridge without a single other building in sight. As well as their own private game reserve, owners have access to a restaurant, a spa set in one of the lodges, and concierge service. Buyers have the option of buying a lodge in its entirety, and there is also the opportunity to buy three freehold farms at the neighbouring Ka'Ingo Private Game Reserve.
Article by: Ginetta Vedrickas, Freelance Writer, Property - http://gulfnews.com