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'Property in Brazil' could grow in value due to sporting events

Date added: 11th June, 2010 at 14:27
(view all articles from June, 2010)

Property in Brazil could see an increase in value, as the country will be hosting two major sporting events in the future - the World Cup in 2014 and the Olympic Games in 2016.

This is the opinion of executive director of Sotheby's International Realty South Africa Ya'el Geffen who, writing for realestateweb, said that the investment in infrastructure and urban regeneration that such competitions demand, alongside the social impact of being a host city, has proven in the past to lead to a rise in property prices.

According to Mr Geffen, previous loactions in which the Olympics have been held - Athens, Sydney, Atlanta and Barcelona - saw values in these assets increase 19 per cent compared with figures from five years before the event.

The World Cup has had a similar effect, with Paris property gaining 55 per cent in worth year-on-year after the tournament was held there in 1998, while some buildings near the stadium were seen soaring in price by more than 100 per cent, he noted.

Guilherme Caldeira of Brazil Sotheby's International Realty told Mr Geffen that the Brazilian Association of Real Estate Management has reported more significant gains in the value of real estate in areas that are hosting the Olympic Games, such as Barra da Tijuca.

"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 10 to 20 per cent," Mr Caldeira commented.

Holding major tournaments also brings long-term benefits, such as greater tourism and the creation of jobs, which Mr Geffen stated would result on thousands of new buyers on the market for housing.

For the 2010 World Cup, he noted, the host country South Africa is expected to see over 370,000 tourists, each of which will take on average an 18-day stay and spend around R30,000 (£2,643).

Tom Stevenson, investment director at Fidelity International, recently said a Goldman Sachs prediction that Brazil's economy would expand by 6.4 per cent this year is one that has been continually revised upwards due to emerging evidence of the country's stronger-than-expected recovery.

According to the Wall Street Journal, the Brazilian Economy Perspective - a report released recently by the Brazilian finance ministry - said the government had increased its projection of economic expansion this year from 5.5 per cent of gross domestic product to 6.5 per cent.

Mr Stevenson agreed with Mr Geffen that sporting events will attract investment in the nation, adding that the retail sector is likely to see significant benefits as consumption rises during the tournaments. ADNFCR-1477-ID-19832248-ADNFCR