Investors warned over Olympic returns

Permalink: Investors warned over Olympic returns
by Gill Montia

According to Hometrack, the independent property research company, those looking for good short-term profits on their property investment should avoid East London in spite of the 2012 Olympics being held there.

An initial sudden rush in demand due to the expected economic regeneration of the area has been disappointing, Hometrack believe this could be partly due to the feeling that London property prices were nearing their peak.

Hometrack added if house prices rise in line with income over the next decade, parts of East London have got a realistic chance of outperforming the long run average for property prices in London.

Hometrack concluded that many investors just want the best capital growth they can get in the next few years so they probably wouldn’t want to buy in East London anyway.

Despite the above, Impressions Magazine commented that the “Olympic effect” has occurred previously – Barcelona in 1992, Atlanta in 1996, Sydney in 2000 and Athens in 2004 – discovered that property prices in each city, except Atlanta, were boosted by transport upgrades, the development of first-class leisure facilities and overall regeneration.

Many reports highlighted that property prices rocketed by 63% in Athens in the 5 years prior to the 2004 games, while those in Sydney rose 50% in the same period before the 2000 games and those in Barcelona rose 131% in the 5 years before the 1992 games.