The winner of the World Cup is often the property market of the host country
Hosting a FIFA World Cup generally creates a significant increase in demand for short-term rental accommodation in the cities where the stadiums are located, leading to dramatic price increases, but the increase in the sales market takes place over many years.
The short-term revival of the real estate market, such as rising rents Qatar and nearby dubai feel – usually only last a few weeks and mainly affect properties near the stadiums. The long-term impact of hosting one of the world’s biggest sporting events on residential property markets is more complex and difficult to assess. The effects of hosting the football tournament often unfold over years and vary greatly from country to country and city to city.
Unlike the Olympics, which are held in a single city, World Cup matches, which take place every four years, are scattered across multiple cities and can span huge geographic areas.
The current World Cup, hosted by Qatar, is unusually compact, taking place in five cities a few hours drive apart, but the 2018 World Cup in Russia was held between 11 cities spanning thousands of miles . The 2026 World Cup, which will be hosted by the United States, Mexico and Canada, is set to take place in 16 different cities across the three countries, with up to 3,000 miles between some stadiums.
This makes the impact of hosting a World Cup particularly difficult to catalog. Brokers said the effects could start months or even years before the month-long tournament and continue for years in its wake.
“Ahead of the World Cup, there was a surge in demand for properties suitable for accommodating the influx of football fans, their families and friends,” said Craig Hutchinson, CEO of Engel & Völkers South Africa. The 2010 World Cup was held in nine cities in South Africa, including Johannesburg, which brought “many tourists who normally would not have traveled to South Africa to experience the country for the first time “.
Urban infrastructure upgrades often made in the run-up to hosting a World Cup tournament can add lasting appeal and value to host cities, and the huge spike in tourism during a World Cup can result in real estate sales years later.
“Properties that were suitable for conversion into guesthouses or Airbnbs were in particularly high demand…particularly around major stadiums,” Mr Hutchinson said. “There was no evidence of an increase in demand for international property buyers directly after the FIFA World Cup, but what we did notice was an increase in international buyers around three years after the organization of the World Cup.
He attributed this delayed effect to visitors who discovered South Africa during the World Cup, returning for subsequent holidays and eventually committing to buying properties, particularly in popular tourist areas and second homes.
“The biggest increase in the number of international buyers has been in the Western Cape regions, from the Garden Route to the vineyards and up the west coast of South Africa, as well as in Mpumalanga, in the Kruger National Park region,” he said. .
This means that while cities that hosted World Cup matches saw increased real estate activity in the short term, it was parts of the country away from football stadiums that could have benefited from the tournament in the long term.
“The effect of a well-organized FIFA World Cup is not only a short-term gain for the country and its tax authorities, it also leads to long-term gains by increasing the attractiveness of the country’s destination. , which in turn leads to positive demand in the real estate industry,” Mr. Hutchinson said. “The long-term results are harder to measure, … but that’s where and in the South Africa, it was positive.”
In Brazil, which hosted the 2014 World Cup, prices for short-term rentals rose stratospherically during the tournament, which took place in 12 cities. Prices for hotel rooms in Rio de Janeiro, where the final took place, have increased by up to 600%, prompting many visitors to rent apartments or rooms from private individuals at unprecedented prices.
The long-term impact was also pronounced in Rio de Janeiro, which also hosted the Olympics in 2016. Property prices began to rise sharply in the seaside city two years before the World Cup and had risen around 30% at the time of the tournament. started, said Benjamin Cano, CEO of real estate agency RIOException.
The sharp rise in house prices has led to “a good market but a tough market”, he said. “We achieved the best prices from 2014 until mid-2016. Then the market almost stopped until 2019. It was really slow because the prices were so high that no one was buying. The Covid situation took prices to the floor and started to move the market again. »
But his observation of the broader Brazilian market reflects the diffuse and complex long-term impacts of hosting a World Cup, suggesting the effect on demand and property prices is greatest in cities. which already have a lot to offer international buyers. “I think Sao Paulo also had a side effect, but the other places in Brazil didn’t really benefit significantly,” he said. “Rio is Rio. It is the showcase of Brazil.
The current World Cup in Qatar illustrates the sometimes unexpected ripple effects that hosting the event can have on real estate markets. While property prices in Qatar have risen slightly ahead of the tournament, it is landowners in neighboring Dubai who are likely to reap most of the benefits. Dubai brokers were anticipating an increase in luxury property sales during and after the World Cup due to increased football fan tourism. Dubai topped Knight Frank’s Prime Global Cities Index 2022 for the third quarter, with price growth of 88.8% in the year to September 2022 and 29.3% for the third quarter alone quarter 2022.
North American host city brokers are optimistic ahead of the 2026 World Cup, which will see 60 games played in 11 US cities, as well as 10 games in Toronto and Vancouver, and 10 games in the Mexican cities of Guadalajara, Mexico and Monterrey. The increase in tourism associated with the event is an opportunity to show visitors what the host cities have to offer shoppers.
“I can’t imagine people buying a property just for the rental opportunities of a short-term event like the World Cup,” said Andrew Carros, CEO of Engel & Völkers Vancouver. “Vacancy rates and inventory are already low in Vancouver. However, if someone is already looking for an investment property, it could add to the allure of choosing Vancouver. … We are a city built on lifestyle and anyone who has the opportunity to witness Vancouver’s beautiful scenery may consider moving to this part of the world.
He compared hosting the World Cup to high profile international events held in the Canadian city, including the Winter Olympics.
“We’ve seen a lot of infrastructure improvements, like transportation, that have helped the city grow and expand tremendously,” he said. “In this regard, we believe the Olympics have had a lasting impact on our real estate market.”
Overall, he predicts that Vancouver’s appeal will continue to reside in the high quality of life it offers residents.
“It’s our scenic landscape, economic stability and way of life that attract international buyers the most. Any globally recognized spotlight or event will inevitably bring a fresh look to the city, but we don’t suspect it will drive the real estate market,” he said.
Valerie Post, licensing partner at Engel & Völkers Boston, said the city constantly attracts new buyers coming for its world-class academic, technological and scientific institutions, as well as its robust job market, but “such a shining spotlight that the World Cup alone further underscores the many benefits of living in New England for our global prospects.
She expected increased interest from investors looking for rental properties as the World Cup approached, as well as an increase in property sales in its wake.
“We know that hosting the 2026 FIFA World Cup will be a tremendous opportunity and we are delighted to showcase the lucrative rental market that exists in our region,” she said.
In the long term, she expects hosting the tournament will result in “new, well-paying jobs that are always good news for housing markets.”