Buy Abroad News

12 Jan 10

Is The South African Property Market Set To Get A Boost From The 2010 World Cup

After a positive spike in house prices in South Africa back in 2004 when the average price rose 29.5 percent, there has been a steady decline in averages prices ever since.

The FNB House Price Index average for 2009 showed a decline of -3.9 percent compared with the average value for 2008.

However with the football world cup on its way in 2010, surely we will see a halt to the decline and even an increase in average prices.

It is no secret that South Africa has suffered for many years with unrest and the most pressing current problem being the huge influx of migrants fleeing Zimbabwe, where President Robert Mugabe has made life very difficult for all but a handful of people in the country.

Now there is genuine optimism that the arrival of one of the most prestigious world competitions and the economic benefits that it brings to the host nation, will rub off on the average house price index.

David Matoumpeke a real-estate agent in Cape Town said “despite the decline in willing buyers over the last few years, we still see people coming to South Africa to buy a holiday home, particularly those who know the country and have been many times before. It is true that the pure investor has disappeared from the market, as rental returns do not justify the capital outlay at the moment and capital growth has been a non event over the last two to three years. The 2010 World Cup however should help boost a flagging market even if only temporarily”.

George Harborn from Buy Abroad said “it’s difficult to see a one off event such as The World Cup having a anything other than a short term effect on prices in South Africa. The country still remains a place where "holiday homers" buy because they like it, rather than an investment driven purchaser.