Will SA property see a Soccer World Cup 2010 boost?

06-04-2005

If you are planning on buying an investment property with the hope of making windfall capital gains when the 2010 Soccer World Cup sweeps South Africa, think again.

This warning has been sounded by the Rode & Associates team of property economists and valuers. They say potential investors would do well to consider the following factors:

• The Soccer World Cup of 2010 will be spread over a number of South African cities and therefore the impact on each particular area will be diluted.
• It might be true that flat rentals in the immediate vicinity of the various stadiums could receive an injection, but the effects of such an artificially generated boost would soon wear off.
• In the final analysis, house prices are driven by fundamentals. At the moment, the South African house market is nearing its 20-year peak and the chances are that in five years’ time, house prices would already be in a long-term downturn phase.

Think twice, therefore, before investing in an irrationally high-priced house in anticipation of super rentals during a three-week period in 2010!