After the euphoria of winning the bid to host the 2010 Soccer World Cup, South Africans in all sectors must now work together to ensure that this opportunity is fully utilized for the long-term benefit of the entire country.
Hosting this major sporting event will be a massive boost to our economy and it is expected that almost R 30 billion will flow into South Africa, spurring economic growth to between 5 and 6 percent, while creating an estimated 150 000 jobs. The impact on the property market will be enormous.
South Africa is currently enjoying a strong position and consumer confidence is buoyant. International buyers, locals and expatriates are major buyers of South African properties.
The property market will do well to use the 2010 Soccer World Cup as a platform to aggressively market property in South Africa, which is still undervalued in global terms and offer exceptional value for money.
South African property is likely to receive a major boost from 2010 - if the World Cup is a success. Paris "France" property prices escalated by as much as 55% over a one year period before and after the 2002 Word Cup and property across the city made astronomical gains with the prices of apartments close to some of the stadiums rocketing by over 100% over the same period.
Some neglected neighborhoods in Paris were completely rejuvenated. The same will happen in South Africa, because although we have had a good run, in global terms our property is still undervalued and the macroeconomic outlook is very favorable.
Hosting an Olympic Games or World Cup encourages urban regeneration and is usually accompanied by an improvement in facilities, transport links and overall infrastructure. Yet, a closer look at the lessons of the Olympic Games hosted in Athens means a lot of work needs to be done - especially in marketing South Africa as a destination.
There is a lot to be learned from the Greek Olympic experience on how best to sell South Africa as a desirable country and etch ourselves into the minds of tourists and investors for a long time to come. Greece did not fully capitalize on the Olympics to promote itself and its property market to the extent that former Olympic host cities Barcelona and Sydney did - and lost out on some of the benefits of hosting a major international event.
Perhaps they were a bit complacent and thought just because they?d secure an event like the Olympics people would come running. The key learning is that Barcelona and Sydney went out of there way to make themselves outsider and investor friendly and strongly promote themselves through a fantastic marketing effort as a great place to buy a second home. And the Spanish in particular are probably the best in the world at selling their own property and the sensual and relaxed Spanish lifestyle. This has translated into massive job creation and social upliftment through increased tourism and a very favorable country perception. Around 60 000 UK citizens bought a home in Spain in 2003.
Just think if South Africa could increase its visitors by tens of millions a year to get close to the number of people who visit Span each year. We would have an incredible success story for job and wealth creation. When Sydney hosted the Olympic Games in 2000, they pushed not just Sydney as a city but the howl of Australia as a desirable place to tour, live and own property. There was a unified strategy between the government, the tourist board and the property industry.
In South Africa we can?t afford to just promote the cities that will host World Cup Soccer games. We also need to promote the true spirit of South Africa as a highly desirable investment friendly and stable country. Well planned government expenditure aimed at local regeneration will give impetus to host cities in creating a more suitable and attractive inner-city environment - that?s because public infrastructure that would otherwise have taken years to complete due to red tape will now be fast-tracked.
For example, the R 20-billion Gautrain high-speed service between Johannesburg and Pretoria will certainly be completed in time for the 2010 World Cup, creating a wealth corridor and increased property values across both cities.
Other projects that stand to benefit from the event include Coega?s giant "signature bridge", the Statue of freedom in Port Elizabeth and Durban?s new international airport at La Mercy, North of Durban. All of these will be fast-tracked into reality by 2010. In Cape Town , the N2 Gateway Project has been launched by the Housing Minister, Lindiwe Sisulu, in an attempt to replace the tin and cardboard shacks along the highway to improve the quality of life for hundreds of thousands of locals and remove an embarrassing eyesore before the influx of millions of tourists into the Mother City for the World Cup Soccer finals in 2010.
2010 is also having an effect on building costs. Many building contractors are holding out for money spinning 2010 World Cup contracts, creating a shortage of builders. Stadiums must be build, renovated and expanded in time for this major event. Many stadiums are also being build especially for the event like Nelspruit?s Mbombela stadium scheduled for completion in 2007, at a cost of R 350 million.
However, most of the benefits from hosting this event come in the form of multiplier effects of each rand spent on all goods and services in the economy leading up to, during and after the event. The increased health of the economy will have the biggest overall effect on property prices.
International property investment specialist: Jannie Botha is an independent sales consultant (property broker) based in tropical Amanzimtoti, Kwazulu Natal, South Africa.
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