House prices go for gold in Olympic host cities
06 July 2005
Source: HBOS press release
As London celebrates being awarded the 2012 summer Olympic Games, Halifax has examined the link between hosting an Olympic games and the impact on house prices.
The regeneration effects from hosting an Olympic games has generally had a positive impact on house prices. Each of the previous four host cities have seen house prices rise by more than the national average over the five year period in the run-up to the Olympic games, the main period of Olympic related development activity. The level of outperformance was, on average, 18 percentage points.
Barcelona was the best performer with prices rising by 131% versus an 83% increase in Spanish house prices in the five years leading up to the 1992 Olympics.
Table 1 House Price changes in Olympic cities in the 5 yrs leading up to the Games
5 yr % increase host city 5 yr % increase host nation Difference
1992 Barcelona 131% 83% 49%
1996 Atlanta 19% 13% 7%
2000 Sydney 50% 39% 11%
2004 Athens* 63% 55% 8%
Average 66% 47% 18%
*Data for Greece is for 4.75 years not 5 yrs (see notes to Editors for House Price Sources)
Key Findings:
Hosting an Olympics is usually associated not only with an increase in sporting facilities but also an upgrade of transport and cultural/leisure facilities. Barcelona Athens and Sydney all saw a significant upgrading of their urban infrastructure and this city rejuvenation is likely to encourage higher house prices.
In Barcelona, amongst the Olympic related projects, 78 km of new roads were created. There was a 17% increase in the sewage system, a 78% increase in green zones & beaches and a 268% increase in the number of ponds & fountains.
The scale of Olympic redevelopment is reflected in the high costs associated with hosting an Olympics. The Barcelona Olympics was the most costly of the recent Games at an estimated cost £8.1bn. The estimated costs for other Olympics were for Atlanta £1.5bn, Sydney £2.5bn and Athens £8.0bn.
More
Tim Crawford, Group Economist at Halifax, said
'This is great news for London. Hosting an Olympic games encourages city regeneration and is usually accompanied by an improvement in facilities and transport links. These factors tend to be positive for house prices. Homeowners in Hackney and Stratford, could potentially reap similar benefits to other Olympic precincts over the longer term.'
Regeneration boosts prices in Olympic surrounds at Sydney 2000 Games
Areas close to the Olympic complex usually see the largest increase in house prices as they benefit from improved facilities and better transport links. This was clearly evident in the main area of development for the Sydney Olympics, Homebush Bay, a former industrial site 20 minutes from the centre of Sydney. House prices in Homebush rose 70% in the five years in the run-up to the Olympics, compared to a 50% increase in Sydney house prices.
Table 2 House Prices in Sydney in the lead up to the yr 2000 Olympic Games
1995 2000- Year of the Games % Increase over 5 years
Homebush $248,000 $422,000 70%
£98,704 £167,956
Sydney $197,000 $295,000 50%
£78,406 £117,410
Homebush house price as a multiple of Sydney 1.26 1.43
Source: NSW Department of Housing
In Atlanta house prices rose by 19% in the five years leading up to the 1996 Olympic games. This compares with 17% price growth in Atlanta's home state, Georgia and 13% growth in the US over that period.
Looking forward to the 2012 Olympic Games
East London will see a massive upgrade in facilities from hosting the Olympics. The area would benefit from a 500 acre Olympic Park reaching from the Hackney Marshes to the Thames, which is planned to include an Olympic stadium, aquatic centre, along with several other sporting complexes and a 17,800 person Olympic village. It is estimated that there will be 5,000 new homes on the site post the Olympics. There are also proposals for a 45% increase in ca
|
|
