Sporting events: Do they mean anything for the property market?
With several major international sporting events scheduled in South Africa, London and Brazil over the next few years, the property market is definitely heating up.
Past international sporting events have proved that being a host city brings investment in public infrastructure, urban regeneration, a significant social impact and an increase in property values.
On average, the previous Olympic host cities of Athens, Sydney, Atlanta and Barcelona all outperformed their national markets, with 19% higher property prices in the five years leading up to the games.
Similarly, before and after the 2002 World Cup in Paris, property prices increased by as much as 55% over a one-year period before and after the tournament, with properties near the stadiums rocketing by more than 100% in value.
The 2010 FIFA World Cup has and is going to have a dramatic impact on the country.
It is estimated that over 370 000 tourists will visit South Africa for the World Cup. They will stay an average 18 days and each is expected to spend around R30 000 (US$4500), therefore injecting much-needed money into the economy. Thanks to the World Cup, over R40bn (UD$5,45bn) has been spent on upgrading the country's infrastructure, including roads, airports and public transport as well as the stadiums.
The long-term benefits include the increase of tourism and the creation of thousands of new jobs. This will, in due course, translate into thousands of new homebuyers and owners.
From a property perspective we are very excited.
Charles Smith of Sotheby's International Realty in London, host city of the 2010 Summer Olympic Games, recognises that it is not just the immediate rise in property prices that will have a positive impact on the United Kingdom capital - the legacy of the Olympic zone is also crucial.
"Global sporting events can be the catalyst to make major infrastructure projects happen, improving transport connections and leisure facilities, benefitting the city in the long-term long after the games are over," says Smith.
The announcement that Rio de Janeiro will host both the World Cup in 2014 and the Olympics in 2016 already is having positive consequences.
"Investment in real estate has been rising in Brazil since 2008 and there have been significant increases in land speculation, which have increased residential property prices by 10 to 20%.
"The Abadi (Brazilian Association of Real Estate Management) has reported a greater impact on rising real estate values in areas where the Olympics will be taking place, such as Barra da Tijuca," says Guilherme F.Caldeira of Brazil Sotheby's International Realty.
Vancouver also has reported many favourable benefits due to the global exposure of hosting the 2010 Winter Olympics earlier this year.
"The spotlight on Vancouver has educated people about Canada's sophisticated economy," syas Anna-Maria Retsinas of Sotheby's International Realty Canada in Vancouver. "There has been significant foreign investment in and around Vancouver and British Columbia from Europe and Asia as a direct result. In turn, we are experiencing an increasing number of inquiries for our local properties."
*Ya'el Geffen is executive director of Sotheby's International Realty South Africa
Article from: www.realestateweb.co.za