Avoid a World Cup property ‘own goal’
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.