The consensus of opinion among estate agents reporting at national level is that the 2010 World Cup is beginning to have a significant effect in the property sector.
So says Ivan Neethling, chairman of the Western Cape branch of the Institute of Estate Agents.
"Estate agency chiefs from all regions are now reporting interest from foreign buyers. There is, I am told, a strong overseas contingent prepared to buy, not just rent, for the duration of the World Cup and longer," he says.
One Kwa-Zulu Natal agent, said Neethling, had sold a R2 million home to a foreign buyer, and was now lining up other properties for this buyer and his associates who are also keen to invest ahead of the 2010 World Cup.
"Foreign buyers are particularly interested in large homes in good suburbs where they can achieve a good return on the rentals during the World Cup."
In the rental market, said Neethling, reports from Gauteng and Cape colleagues testify to good properties, with four to eight bedrooms, close to stadia, being able to charge R10k or more per night for the World Cup period. Even owners of fairly humble homes, he said, are finding that they are being offered rentals of R750 per person per night.
Despite the plethora of new hotels being erected around the country, it has become doubtful that a high enough proportion of available rooms will fall under the luxury category.
While the global economic slowdown continues, South Africa's hospitality industry remains upbeat with ongoing positive growth reflected in the hotel market, and with major global operators clamouring to gain a presence. This is the 2009 view of Joop Demes, CEO of Pam Golding Hospitality, who adds that "at the outset of 2008 we noted the increasingly positive trend in this industry which was evident despite widespread panic regarding the oil price, inflation and electricity shortages and tariff hikes".
"Now, a year later, we remain extremely optimistic regarding the prospects for the hospitality industry in South Africa and its ongoing resilience," he says.
"To understand why our country is faring so well when compared to the rest of the world we need to bear in mind that in South Africa approximately 91% of every single-bed night that is sold in the hotel industry is sold to someone who lives in Africa. Over the past five years we have experienced exceptional growth in GDP and while this has slowed considerably, our economy is still growing.
"In addition, South Africa has two other unique global competitive advantages – strong liquidity, and being host for the prestigious 2010 Soccer World Cup which takes place in less than 500 days," says Demes.
The Western Cape particularly looks set to fall short in the luxury sector, with developers struggling to complete projects in time for the World Cup.
He also says the banking fraternity's hesitancy to provide funding, buoyed by negative, unsubstantiated commentary, is also a factor that may well contribute to the failure to provide enough accommodation.
To further strengthen the call for more 2010 accommodation, last month, Danny Jordaan, head of the 2010 Fifa World Cup Local Organising Committee, said South Africa still needs 200 000 beds to accommodate soccer tourists.
"We must find 200 000 beds. If there is more accommodation available that we don't know about, we would like to hear about it, because we need more beds."
A percentage of those beds will be needed within the luxury sector and even a conservative figure of 15% equates to some 30,000 beds.
"The World Cup draw to take place at the beginning of December will no doubt trigger a flurry of bookings," Demes says. – Eugene Brink
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