How Big Events Like The Olympics Impact On Real Estate

Olympics thames

The London 2012 Olympic rings floating down the Thames

As the Olympics has drawn to a close and the Paralympics is on the horizon, we take a look at how big events like the Olympics and the football World Cup impact on a city’s, or a country’s, property market.

Experts agree that the Fifa World Cup was successful in terms of foreign investment on the South African real estate market, with the increase in exposure and visitors playing a vital role in the property industry. Property prices are at a premium, especially in the highly sought-after areas across the country such as Sandton, Bishops Court, Camps Bay and other key residential areas. Many celebrities are now considering SA as an area to purchase property.

In early 2010, property prices were surging again – after a few years of low growth – and this surge was thanks to the boost the World Cup provided. This growth has since slowed, with the waning of football fever, lower economic growth, rising inflation and political corruption concerns.

In London, residential property prices in parts of the East of London where the main Olympic stadium is situated have gone up by £192 (R 2,500) a week since London was awarded the Games in July 2005, according to a new study.

Lloyds TSB research reveals a mixed picture for the East London housing market. Homeowners living close to the main site for the London 2012 Olympic and Paralympic Games have seen the value of their property rise by nearly £60,000 (R784,108)on average.

The average house price in the fourteen postal districts closest to the main site for the London 2012 Olympic and Paralympic Games rose by 28%, some £58,582 (R765, 577), from £208,148 (R2,720,177) in July 2005 to £266,730 (R3,485,785) in May 2011, equivalent to a weekly increase of £192 (R2,500).

Between the 27 July and the 12 August, the number of property sales agreed by Marsh & Parsons in London rose by 23% compared to the same period last year. The number of sales agreed was also 35% higher than during the same 17-day period in 2010.

Oddly, Stratford, the home of the Olympic Stadium, saw a 13% rise in house prices over the period, less than half the average increase across East London.

In Sydney, there was substantial real estate development the private sector in the period around the Olympics – this growth was assisted by the Olympics raising the profile of this area in Sydney. However, the price of real estate property had seen growth of 10% annually in Sydney from 1993 – 1999, but then dropped dramatically after the 2000 Olympics was over.

It is clear then that the infrastructure, tourism and hype provided by big events such as the world cup undoubtedly provide a much-needed boost to an economy in the short term, and to a certain extent play a role in long-term growth, especially when considering the improved transport links and infrastructure they provide. Factors such as this add greatly to real estate demands and values. However, the short bursts of growth that have been experienced in most cities or countries that have hosted these events is not sustained, and there needs to be a restructuring in how the impact of such events can be further sustained so that growth in sectors such as real estate and tourism see greater growth and overall economic development in the long run.

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One response to “How Big Events Like The Olympics Impact On Real Estate”

  1. bishops court cape town says :

    Really decent post How Big Events Like The Olympics Impact On Real Estate The BetterBond Blog! Carry on posting!!

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