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Among Olympic cities, Rio tops residential price growth post-2008
WITH the successful completion of the Olympics in Rio de Janeiro, the 2016 host city in Brazil has another reason to celebrate.
Shrugging off the effects of the global financial crisis, Rio has seen the strongest residential price growth among six Olympic host cities since 2008, according to Savills World Research.
The city recorded an increase of 216 per cent, from US$40 per square foot in 2008 to US$130 psf in 2016. This is despite the drag on the Rio residential market in the past year due to domestic economic conditions, which led to a 4 per cent fall in prices from June 2015 to June 2016.
Rio may have registered the biggest jump in prices since 2008, but it is still the lowest-cost among the six Olympic host cities featured in the report. The other five mentioned are Sydney, Athens, Beijing, London and future host Tokyo. The prices listed are a blend of prime and mainstream properties.
Sydney, the 2000 Olympics host, has seen the second highest growth of the cities with a 125 per cent increase to US$610 psf, buoyed by "strong national and city economics" but is now levelling.
2012 Olympics host London ranks third among the cities when it comes to price growth, having gone up by 79 per cent since 2008. It is also the most expensive of the lot with average prices of US$1,400 psf - more than 10 times dearer than lowest-cost Rio.
Residential prices in Beijing have also gone up 74 per cent since the city hosted the Olympics in 2008, rising 17 per cent in 2016 alone. The report said this was due to "a series of stimulus policies" that have had a positive impact on both transaction volumes and prices in Beijing since late 2014.
Not all the Olympic host cities have seen a price growth in residential markets since the 2008 financial crisis. Athens, for one (which hosted the Olympics in 2004), has continued to show price falls for the last eight years. Its psf price is now US$180 - a decline of 43 per cent since 2008.
Future host city Tokyo has also seen price falls since 2008, but recovered 31 per cent from 2011. Savills suggested this was, in part, due to its 2013 bid to host the 2020 Olympics. Its overall price growth from 2008 stands at 6 per cent.
Residential prices in Tokyo are now US$1,100 psf, second to London when it comes to overall cost. Savills said Abenomics has "fuelled new construction and helped stimulate price growth".
For the 2020 Tokyo Olympics, most of the new infrastructure will be located in the Tokyo Bay area, with the athletes' village situated on the Harumi waterfront.
Savills added that the Games are anticipated to be a catalyst for new condominium and commercial development in this traditionally overlooked area.