When football's World Cup kicks off in South Africa next June, the owners of some of the most luxurious houses on the country's Cape coastline will be enjoying a lucrative windfall. According to South Africa's Weekend Argus newspaper, luxury seafront villas at Camps Bay, one of the most exclusive parts of Cape Town, are being let for the month of the tournament at up to Rand 75,000 (£5,600) a day. The owner of one particularly large property – a mansion called Faire Seate – was reported to have negotiated a deal with FIFA executives to rent the house for between R1.2m and R1.6m, or up to £120,000, for the four-week period.
For the last couple of years, the effect the World Cup might have in boosting property prices has been a hot topic of conversation, especially in South Africa's estate agent community. As property consultant Jannie Botha put it in an article published last year: “South African property is likely to receive a major boost from 2010 – if the World Cup is a success.” During the 2002 World Cup in France, claimed Botha, prices in Paris rose dramatically, and in some areas close to the stadiums, prices were up by 100 percent in the 12 months around the tournament.
And there are similar expectations elsewhere surrounding other major sporting tournaments. Brazil is set to host the 2014 football World Cup and it is already being used as a marketing platform, particularly in under-developed regions such as Natal, which will be hosting some of the games.
In New Zealand, there is great excitement about the Rugby World Cup in 2011, with homeowners in Auckland reportedly keen to cash in on the anticipated shortage of accommodation.
Whether a major sporting event is a good reason to invest in property, however, is a moot point. For any one-off event, the exceptional income generated by letting will also be a one-off, and that's assuming that your property is chosen from among the many competing for lucrative rentals.
The more powerful argument is that major sporting events act as a catalyst for regeneration, with new stadia, transport and other infrastructure all constructed in the lead-up to the event itself, and that this makes the area a much more attractive place to live in the long term. For some under-developed regions – and north east Brazil may prove a good example – that major sporting tournament can also result in images being beamed around the world, which helps to place it on the map as a tourist destination. It shouldn't be the only reason to invest, but it can certainly help.
Alexander Garrett is a freelance property writer who contributes regularly to The Observer and British Airways' Business Life.
related news
- Brazilian magic