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The Cup of good hope

01.05.2010
Author: Mark DA SILVA, Homes Overseas UK Edition
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South Africa will host the 2010 FIFA World Cup. According to experts, this event can bring big dividends to the national real estate market.
As soon as the main football organization FIFA announced that South Africa would be the venue for the 2010 World Cup, prudent buyers of foreign real estate from all parts of the world began to look at South Africa in a new way. Obviously, such a major sporting event will raise the status of the local real estate market and have a positive impact on the development of local infrastructure.
South Africa has already hosted a number of prestigious international sporting events, including the Rugby World Cup in 1995, the Cricket World Cup in 2003 and the Women's Golf World Cup in 2005, but the football Championship will be a special event even against this background. This is one of the largest events in the world of sports, which attracts the attention of billions of fans from all over the world. In addition, this championship will be the first to be held on African soil, and it has every chance to become the brightest in the entire football history.
It is expected that approximately 350,000 football fans will fly to the games in South Africa during June-July 2010. But it is worth considering that, for example, the 2006 Championship, which was held in Germany, attracted about a million visitors, and South Africa should also be ready for a greater influx of people.
According to approximate calculations of economists, the holding of this event will create 129,000 new jobs, bring about $1 billion in taxes to the state and ensure GDP growth of $2.5 billion.
Lanice Steward from the South African real estate agency Anne Porter Properties says: "By giving South Africa the right to host such a significant event, FIFA is giving confidence not only to the country, but also to the African continent as a whole. This will affect the long-term prospects of the residential real estate market in Africa. It should also be remembered that new infrastructure facilities are being built for this event, airports are being upgraded, roads are being laid."

The market situation
2008 was not the best for the housing market in South Africa. According to the First National Bank of South Africa, residential real estate in South Africa fell by 4% last year, and according to the largest African bank Standard Bank – by 3.6%. According to Standard Bank's latest reports on the state of the country's real estate market, prices are falling due to a decrease in demand for real estate. Stricter credit conditions since June last year have also closed easy access to home purchase financing. The cost of residential real estate on average in the country remains low and is, according to Standard Bank, about $64,000 per object.
Despite the existing problems with bank financing, some analysts, reflecting on the situation in the real estate market of South Africa, predict an imminent boom – on the one hand, thanks to the strengthened national economy, and on the other – in connection with the football championship.
Standard Bank experts believe that the housing sector "is likely to be in decline until all the main driving forces of the market get stronger," but there are signs that it will strengthen somewhat in the near future.
Berry Everitt, Executive director of the international group Chas Everitt International, does not rule out that real estate prices may rise up to 60% over the next three years. In his report , the expert points out: "We believe that in the next few months, prudent investors will have better opportunities to buy properties that, after the market recovery, will provide very good profits."

Everything for rent
If we talk about the immediate prospects, then the owners who rent out housing remain the undoubted winners. At a time when many refuse to buy because of the complexity of the mortgage, they have to rent real estate - so says Andrew Schaefer, managing director of Trafalgar.
According to the latest assessment of rental rates conducted by Trafalgar, the average rental price in the Republic of South Africa in 2008 increased by about 13%.
According to the study, the highest rental growth in the country was recorded in Port Elizabeth (+21%), followed by Pretoria (+16%), East London (+15%), Kwazulu-Natal (+14.5%), Cape Town (+11%) and Johannesburg (+9%).
It is obvious that by the arrival of hundreds of thousands of football fans next summer, a surge in demand for rental housing and an unprecedented increase in rental rates is expected.

South Africa – champion
The 2010 FIFA World Cup will put South Africa in the spotlight of investors around the world. The successful holding of the championship will change the perception of players in the global real estate market about South Africa and Africa as a whole and can greatly increase the demand for housing from foreigners.
Although the main role is assigned to the largest cities of the country, such as Johannesburg and Cape Town, hosting the World Cup will also be beneficial to small cities, primarily in terms of investments in infrastructure.
Maybe the South African football team will not become the world champion, but the national housing market has every chance to win and provide significant income to prudent investors.

Where will the 2010 World Cup matches take place

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