23 October 2016
Home prices in Olympic host cities show varying trends. Photo: Savills
Home prices in Olympic host cities show varying trends. Photo: Savills

How residential markets fare among Olympic host cities

With Rio passing the baton to Tokyo, we take a look at how some of the Olympic host cities have fared in the wake of challenges posed by the 2008 global financial crisis.

Let’s compare the residential markets of Rio de Janeiro to four former Olympic host cities: Sydney, Athens, Beijing and London, along with the next host Tokyo.

London stands apart as the most expensive of the six, with average prices of US$1,400 per square foot (based on a blend of prime and mainstream property).

Rio is the lowest-cost of the six cities, at just US$110 psf, more than 10 times cheaper than the 2012 host.

When it comes to price growth, though, Rio de Janeiro is the frontrunner.

It saw the strongest run up until 2015 and, today, capital values stand some 216 percent above 2008 levels.

Domestic economic conditions have since dragged on the Rio residential market and the recent slowdown has seen price falling 4 percent in the year to June 2016.

Sydney has seen the second highest growth of the Olympic cities, buoyed by strong national and city economics but is now levelling.

In Beijing, residential prices are up 74 percent since the city hosted the Olympics in 2008, rising 17 percent in 2016 alone.

A series of stimulus policies have had a positive impact on both transaction volumes and prices in Beijing since late 2014.

Two Olympic cities stand out from the group for having failed to recover from the knockout blow delivered by the global financial crisis.

Athens, the birthplace of the games, has continued to show price falls for the last eight years.

Prices here stand 43 percent below their 2008 peak. The only positive news seems to be that the rate of decline has slowed, down 2 percent in the year to June 2016.

Tokyo, too, saw price falls until 2011 but, perhaps buoyed, in part, by their 2013 bid to host the 2020 Olympics, price growth subsequently totalled 31 percent.

Abenomics has fueled new construction and helped stimulate price growth.

Looking ahead to 2020 the majority of new infrastructure will be located in the Tokyo Bay area, with the athletes’ village on the Harumi waterfront.

The games are expected to be a catalyst for new condominium and commercial development in this traditionally overlooked area.

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Contributor at EJ Insight

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