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Sporting Events: A Worthwhile Investment?

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World Cup  Investment Property South Africa  Sporting Event Investments  Sotheby''s 

By - Monday 14 June 2010

With all eyes focused on South Africa and the start of the 2010 Football World Cup and several other markets preparing to host major sporting events in the next few years, we take a look at the potential for property investment in various regions.

Perhaps the biggest benefit for many buy-to-let real estate investors is from the global coverage enjoyed because of the increased television coverage, which will generate interest in a particular destination from visitors who may be looking to invest in property.

As an example of the effect that a major sporting event can have on house prices, the managing director of estate agent magazine SOLD, Saul Geffen, revealed that the previous Olympic host cities of Athens, Sydney, Atlanta and Barcelona enjoyed 19 per cent higher property prices in the run up to the Games.

Charles Smith of Sotheby's International Realty in London - host city of the 2012 Summer Olympic Games - realises that the legacy which is left by the sporting event's infrastructure is just as important as the immediate rises which are enjoyed in the build up.

Speaking in an interview with South Africa-based Real Estate Web, Mr Smith explained: "Global sporting events can be the catalyst to make major infrastructure projects happen, improving transport connections and leisure facilities, benefiting the city in the long term long after the games are over.

And in a country such as the UK, where an established tourism market has already been built, improved facilities, transport links and infrastructure are sure to be a boost to the real estate market and could represent a profitable real estate investment opportunity.

Furthermore, another market which is said to be enjoying the effects of winning the contract to host both the next World Cup in 2014 and the Olympic Games in 2016 is Brazil.

"Investment in real estate has been rising in Brazil since 2008 and there have been significant increases in land speculation, which have increased residential property prices by ten to 20 per cent," Guilherme Caldeira, of Brazil Sotheby's International Realty, told the news provider.

"The Brazilian Association of Real Estate Management has reported a greater impact on rising real estate values in areas where the Olympics will be taking place, such as Barra da Tijuca."

However, while it is easy to suggest that property values increase in the build up to sporting events around the country, long-term growth after various Games, World Cups and meetings can be harder to sustain. Established countries tend to perform well because of the tourism market which has already been created.ADNFCR-3415-ID-19833099-ADNFCR

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