Positive spin-offs for South African property from 2010 World Soccer Cup could be felt for four years
|Replying to a series of questions from Marc da Silva, a UK
based journalist, Lanice Steward, MD of Anne Porter Knight Frank, said that
winning the right to host the 2010 World Soccer has already had an impact
on the South African property market and will continue to do so for four
or more years.
The immediate benefits for the hospitality industry at the time that the event is held will obviously be huge but the countrys entire economy is already benefiting from the R100 billion infrastructure development programme put into effect to get us ready for these games.
This, said Steward, has contracted 12 to 15 years development into three years and has, thus far, played a big role in keeping the South African economy out of the recession that has hit so many other countries.
The residential property market, said Steward, will benefit in both the short and the long term.
We are now seeing a demand for B & Bs, guesthouses and hotels and we know from the experience of other countries that have hosted major world events that tourism and holiday home buying continue to feel the effects of such events for four or more years.
Equally significant, Steward said, is the probability that at least some of the 400,000 people visiting South Africa for the World Soccer Cup will become aware that this is a country in which the entrepreneur still has many opportunities and is not hampered by red tape.
We are still an investment friendly country, she said. Some of our visitors will inevitably establish new business connections here and will decide to invest. At Anne Porter Knight Frank we have already experienced this with buyers investing initially in holiday homes but then branching out into industrial and commercial property, manufacturing, distribution and other activities.
An anticipated 3% drop in the interest rates this year, said Steward, coming on top of the 1,5% already granted, will probably revive the property market by the end of 2009. Those buying here in the next twelve months will, therefore, be getting in on a rising market - and Cape Town, with its great natural beauty and flourishing tourist industry, would be a good place to invest because its property environment has always been more stable than that of the rest of South Africa.
Asked what constraints the market could experience, Steward said that high crime levels, although countered by increased police spending, could deter some buyers, while others are still waiting to see if the widely praised constitution will hold up against the attempts by some political players (fortunately a minority) trying to get round it.
The ruling party in South Africa has to accept that it they do erode the rule of law they will simultaneously diminish confidence not only in property but in all forms of investment, said Steward. Right now, the world is still waiting to see whether we stick to the high road established in 1994 or whether we begin to adopt at least some of the unfortunate practices of other African states where democracy has taken a knock.
Article by: www.anneporter.co.za