Property management companies are raising property prices drastically to cater to the high demand of rentals during the FIFA World Cup games this year, in an attempt to take advantage of the huge number of tourists set to enter South Africa during this time. While there is no doubt that the FIFA World Cup will be of huge benefit to the South Africa economy as a whole, not all property companies agree that price hikes are good for the tourism industry.
Tarleys Trust Property Group advises property agents and management companies against raising prices, and encourages property companies to instead consider the disadvantages that extreme price hikes could have on a long-term scale. Many companies are solely focused on profits, and see the FIFA World Cup as a potential to make increased sales and rentals. A large majority of tourists will be entering South Africa for the first time however, and excessive prices could prevent many from considering rentals and sales on return visits. The price increases also affects locals, as increased prices on any level brings the overall value and market prices up significantly, causing price increases across the board, for locals and tourists alike. Commercial property rentals and residential rentals both stand to be affected by price hikes, which could have a huge effect on property prices in general if prices are raised drastically during the months from April to July.
Another aspect that property companies need to consider is the over-saturation of short-term rentals in the build up to the World Cup events. The anticipated demand for rentals has led to huge numbers of guesthouses, apartments, houses, villas and other property available for rent, which more than adequately meet the demands for accommodation especially with a huge increase in property renovation this year. Landlords are seeing the chance to provide expensive but convenient property for tourists, however with the large number of property options to consider, tourists have more choice. This in turn may force many property management companies to push prices down to bring in more chance of their properties being rented out. Experts are predicting that long-term rentals will be in higher demand, and as many landlords are choosing short-term tourist rentals over long-term, this is yet another factor that could affect property rental prices during 2010.
The improved property industry growth has led to many agents and landlords taking advantage of positive property price growth, increased application volumes, increased approvals, further expected relaxation of bank lending criteria, and increased competitiveness amongst lenders. Price increases are widespread to get the benefit from these factors, however on a long-term scale; price increases may not offer a sustainable solution, especially with a slow and gradual recovery from a recession that has left a lasting mark on global economies.
The positive side of the 2010 World Cup is that the event is set to have a huge impact on the residential property market, showcasing the wide diversity of excellent properties across South Africa. With reasonable prices, the lure of South African property could be even greater, advises Tarleys Trust Property Group MD Bradley Berman. Whether it is property sales or residential rentals, all eyes will be on South Africas property market over the next few months, which is why property companies and landlords should ensure ethical property management as a way to ensure that tourists return to South Africa year after year to invest in property.
| About Author Alek Jones : |
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Tarleys Trust Property Group (Pty) Ltd is an independent property management company which focuses on adding value to clients property assets. http://www.tarleys.co.za
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Article Source: http://www.bharatbhasha.net
Article Url: http://www.bharatbhasha.net/real-estate.php/222869
Article Added on Wednesday, March 10, 2010
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