Have you ever heard of the “Olympic effect“? It’s a well-documented phenomenon that has been observed at previous Olympics, such as London 2012, Rio 2016 and Tokyo 2020, to name a few. Largely attributed to the massive investments in infrastructure, transport and sports facilities leading up to the event, this trend is characterised by a significant increase in property values in the host region over the course of the year following the Olympic Games.
The Olympic Games have long been hailed as a catalyst for economic growth and urban regeneration. Of course, there are setbacks too with major investments made for a ‘short term’ event, most host cities are planning for the Olympics and beyond and we can see below some of the cities that have benefited from this. One sector that consistently reaps the benefits is real estate.
Let’s delve into why.
Why the Olympics Boost Property Values
The Olympics trigger a domino effect on property markets by generating:
Infrastructure Improvements: To accommodate the influx of athletes, spectators, and media, host cities invest heavily in transportation, accommodation, and public spaces. These upgrades significantly enhance the city’s overall appeal and live-ability.
Short-term rental surge: As seen in many host cities, Paris likely experienced a boom in short-term rental demand during the Olympics, potentially driving up rental prices.
Increased Tourism: The Olympics put a city in the global spotlight, attracting tourists from around the world. This surge in visitors boosts local economies and creates demand for hotels, restaurants, and other hospitality-related businesses, driving up property values.
Urban Regeneration: Olympic projects often revitalise neglected areas, transforming them into vibrant, desirable neighbourhoods. This revitalisation attracts residents and businesses, leading to increased property demand and prices.
Long-Term Investment: The Olympics can position a city as a global destination, attracting foreign investors and businesses. This influx of capital further stimulates the real estate market.
Case Studies: Paris, London and Sydney
Paris 2024
The French capital has already seen a surge in property prices since being awarded the 2024 Games. While it’s still early days to analyse the data – trends are indicating there will be huge growth in real estate value thanks to the above reasons.
London 2012
The London 2012 Olympics marked a significant turning point for the city’s real estate market.
The Games triggered a wave of regeneration in East London, transforming once-depressed areas into vibrant, sought-after neighbourhoods.
Data from the Office for National Statistics reveals that property prices in London increased by an average of 42% between 2011 and 2016, a period encompassing the Olympics. While multiple factors contributed to this growth, the Games undoubtedly played a role.
The Olympic Park itself has been repurposed into a thriving community, complete with housing, schools, and commercial spaces. This transformation significantly boosted property values in the area.
Sydney 2000
The Sydney Olympics left a lasting legacy on the city’s real estate market. Property values in Olympic Park and surrounding areas soared after the Games, and the area has continued to thrive as a residential and commercial hub.
According to Corelogic, Sydney property values jumped 60% between the Olympic announcement in 1993 and the actual Games in 2000. Westpac Business Bank’s Chief Economist, Besa Deda said that “The 2000 Sydney Olympic Games were estimated to inject around $6 billion into the Australian economy.”
All Eyes on Brisbane 2032
Westpac predicts a significant economic windfall for Australia from hosting the Olympics in Brisbane, estimating at least $17 billion in economic and social benefits nationwide. Queensland is expected to reap the lion’s share of this boost, with around $8 billion flowing into the state’s economy.
This global event is also projected to create a substantial job surge, with 130,000 direct positions anticipated, including a peak of 10,000 roles in 2032. Aligned with these projections, the Queensland Government’s assessment forecasts a remarkable $20.2 billion injection into the economy from international visitors.
It’s important to note that the impact on property prices can vary across different neighborhoods and property types.
Factors such as location, property size, and condition also play a significant role. While the Olympics can be a catalyst for property value growth, it’s essential to consider other market factors, such as economic conditions and interest rates.
If you’re interested in knowing more how you can benefit from the Brisbane Olympics then Spark the Conversation with Property NXT today and Let us Guide You to Your Next Property.