Cup won't push up prices: poll

According to the PropertyGenie poll, hosted on behalf of bond originator ooba, 44.6% of respondents said they did not expect the World Cup to have any effect on residential property prices, while 36.7% expected prices to fall after the tournament and just 18.7% believed they would rise.

Saul Geffen, CEO of ooba, says while consumers are probably right not to expect an immediate effect on property prices as a result of the World Cup, in the medium term it is likely to have a positive influence.

Contributors to property values

Geffen says the huge infrastructure drive by the government to improve the country's roads, public facilities, transport networks and airports for the Soccer World Cup should contribute towards higher property values in the surrounding areas.

“One can expect an improvement in property values in the areas surrounding infrastructure and public facilities upgrades,” Geffen says.

All over SA, the effect of the World Cup is evident, he says.

The stadiums are only one aspect. South Africans can see for themselves the improved road networks, airports, facilities and local governments' investments in the restoration and beautification of the cities.

He says these improvements in infrastructure are necessary whether or not the World Cup is happening, and the event has led to these upgrades taking place in a fraction of the time they were likely to have taken in the normal course of events.

Geffen expects the significant improvements to result in further economic investment and development throughout SA over time, which will have a positive effect on property values.

“With the sporting facilities we now have, there is also further potential for SA to host a number of high-profile sporting events in the future, with the consequent economic benefits that these events would deliver.”

Demand to drive recovery

Geffen says that regardless of the World Cup effect, there is still likely to be continued positive growth in property prices this year due to improving economic fundamentals.

“We expect a demand-driven recovery, assisted by maintained low interest rates, a continued recovery in economic growth and a more stable job market.

“Further relaxation from banks of lending criteria, as well as increased competitiveness among lenders, should also help to stimulate the property market for the remainder of this year.”

Geffen says recent property indicators have shown the housing market is well into positive price growth.

“We expect the continued recovery in the property market to be gradual, with growth in excess of inflation over 2010.”

Source: Business Day