Avoid a World Cup prop­erty ‘own goal’

Weekend Argus (Saturday Edition) - - PROPERTY -

PROP­ERTY in­vestors must not get caught up in the hys­te­ria of the World Cup as kick-off draws near, says Colleen Gray, chief ex­ec­u­tive of the Cen­tury 21 prop­erty group.

“There are un­founded ex­pec­ta­tions that the event will be an un­lim­ited money-spinner for land­lords. Re­ports of homes on the mar­ket to World Cup vis­i­tors for ex­or­bi­tant rentals have fu­elled th­ese ex­pec­ta­tions, but ‘killings’ such as this are bound to be few and far be­tween. Nev­er­the­less, in­vestors con­tinue to be lured by what can only be called mar­ket hys­te­ria with ad­verts along the lines of ‘fan­tas­tic World Cup op­por­tu­nity’ and so on.”

She says sen­si­ble in­vestors re­alise short-ter m World Cup op­por­tunism shouldn’t be the main driver for prop­erty-buy­ing de­ci­sions. The long-term fi­nan­cial vi­a­bil­ity of the prop­erty, af­ter the World Cup, has to come into the equa­tion.

“It’s rel­e­vant to quote an anal­y­sis by the Ger­man In­sti­tute for Eco­nomic Re­search, which found the Ger­man prop­erty mar­ket would ben­e­fit from its ex­po­sure to their World Cup, but only in the long term.

“The re­port im­plied vis­i­tors to Ger­many would be ex­posed to lo­cal prop­erty op­por­tu­ni­ties and that would lead to buy­ing de­ci­sions. I’d ex­pect to see a sim­i­lar sce­nario in Cape Town and Dur­ban.”

Gray says this may ap­pear to be self-ev­i­dent, but many buy­ing de­ci­sions were be­ing taken for the wrong rea­sons.

“There has been con­tro­versy about the fees Fifa want for par­tic­i­pa­tion in its ac­com­mo­da­tion­book­ing pro­gramme.

“There are right rea­sons for us­ing the World Cup as a spring­board for sen­si­ble prop­erty in­vest­ments.

“For ex­am­ple, a flat close to one of the new sta­di­ums could have a World Cup ‘af­ter­life’. In­vestors need to do their home­work,” Gray says.

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