World Cup Impact on Property Investment

From the opulent millionaires' row on Cape Town's beachfront to the modest homes of Soweto township, South Africans are dreaming of a bonanza of cash from next year's World Cup.

Some are preparing to move out of their homes in the hope of renting them to well-heeled visitors for a one-month flood of foreign cash.

Prices for some private apartments in Johannesburg and elsewhere have rocketed recently to three, four and even six times normal, even before most fans have decided where to stay.

In Cape Town's "golden mile" along the beach, some owners of luxurious mansions overlooking the sea and Table Mountain were looking for rents of 90,000 rand ($12,100) or more per day, said Samuel Seeff, one of South Africa's top estate agents.

Such homes, offered to big corporations and in particular World Cup sponsors, would house five or more executives and provide swimming pools, jacuzzis, home theatres and decks from which to admire the stunning views, he said.

The spectacular houses are also protected from South Africa's frighteningly violent criminals with state-of-the-art security measures that are routine among the wealthy here.

At the opposite end of the scale, owners who converted their houses into bed and breakfasts in the historic center of Soweto township are also expecting plenty of World Cup tourists next June and July, but plan to charge as little as 350 rand ($47) per night, with none of the huge price hikes seen elsewhere.

"I don't have World Cup rates," said Dolly Hlophe, who runs a neat bed and breakfast from her home, shaded by a beautifully tended garden on a street in Soweto near Archbishop Desmond Tutu's home.

BIG PROFITS

Although big profits are undoubtedly there to be had -- 450,000 visitors are expected for the World Cup -- experts say the hopes of some property owners could be misplaced as demand slumps below expectations in certain cities, depending on where big teams such as Brazil, England and Germany play.

Like everything else about the World Cup, including plans for where to deploy a fleet of planes, trains and buses, everything is hanging on the tournament draw on December 4, when the location of each team's first-round matches will be decided.

Even before the draw, authorities and some more thoughtful South Africans are worried that too much greed will alienate the visitors and dash hopes that a successful World Cup will stimulate a flood of future tourists by introducing fans to spectacular sights from game parks to glorious beaches.

Commercial Investment Property Overseas: London Property Investment; London Rental Property Market Remains Bouyant

Commercial Investment Property Overseas: London Property Investment; London Rental Property Market Remains Bouyant

European Property Market

RICS has launched the 2009 version of the European Housing Review with an event at the National Liberal Club in London. The Review is now in its eleventh year and draws together what is happening in residential property markets across Europe. It paints a gloomy picture of Europe’s housing market in 2008 and key points include:
• House prices are static or falling across Europe
• The chances of core European housing markets escaping marked downturns in 2009 are now slim
• House prices in 2008 fell significantly in 2008 in central and eastern Europe, Ireland, France, the UK and amongst Nordic countries
• Markets are experiencing rapid falling demand due to the impact of the credit crunch and recession in major economies
• New build markets in the major cities of central and Eastern Europe are at a standstill with a rising tide of unsold properties.
What can we do to address these problems? RICS is calling for action from Governments to increase the supply of mortgage lending. There must be more Government guarantees for mortgage backed securities, as recommended by the Crosby Review in the UK. Banks that have been nationalised or have greater levels of state control in the UK, Ireland, Germany and the Netherlands must also be used to provide a sensible increase in access to credit.
Other steps can also be taken including the establishment of Government supported savings schemes for first time buyers where buyers are encouraged to save a deposit which is topped up by a Government contribution. There must also be a greater use of shared equity and rent to buy schemes.

RICS published a 15 point plan in September 2008 outlining key measures we believe will help the residential property market.
Hopefully if action can be taken by Governments across Europe, the 2010 European Housing Review will start to show some signs of recovery.
http://www.rics.org/ASPNetForums/blogs/padefaultaspx/archive/2009/03/05/gloomy-housing-markets-across-europe.aspx

Munich overtakes London as top European property destination

Munich, followed by Paris, have emerged as the two most attractive European cities for property investment for commercial real estate owners and investors on a medium term outlook, as per LaSalle Investment Management’s eleventh.
European Regional Economic Growth Index, according to a report in the Financial Times.
While London’s size and wealth kept it in the top 10, it was knocked from the top spot for the first time since 2005 - underlining the city’s exposure to the financial downturn relative to rival business hubs.
http://www.wealth-bulletin.com/portfolio/content/1055268273/