The 2012 Olympic Games will be held in London from the 27th of July to the 12th of August 2012. This will be the third time London will have hosted the modern Olympic Games. 205 nations are expected to take part in 300 events.
It is no doubt that, the Games will boost business activity in the UK, but Cities that win the Olympic bid experience neither boom nor bust in their real estate prices, like it is widely believed. Instead they gain construction jobs as they prepare for the Games, according to researchers at the Sauder School of Business at the University of British Columbia.
The UBC study is the first to use real estate variables to test the Games’ economic impact, on host cities. Sauder School of Business researchers analyzed house prices and construction employment in the years leading up to and after the Olympics in Australian, Canadian and U.S. cities.
“We do not find support for the argument of host city backers that the Olympics delivers positive economic benefits, nor of the arguments made by opponents that there is some post-Olympic bust,” said UBC professor Tsur Somerville, the study’s lead author.
“Our results conclusively demonstrate that while construction employment dramatically increases in the period prior to the Games, house prices are the same as they would be in the absence of the Games,” added Somerville.
Somerville and Wetzel analyzed whether the rate of growth in house prices and construction employment is higher in an Olympic city, than a non-Olympic one at the time of the announcement of the awarding of the Games. They also looked at the data during subsequent years leading up to the Games or for a six-year period afterwards.
The study includes the Summer Olympics cities of Atlanta (1996), Los Angeles (1984) and Sydney (2000), and Winter Olympic cities of Calgary (1988), Salt Lake City (2002) and Vancouver (2010). In total, the researchers analyzed quarterly data sets for 300 metropolitan areas in the U.S., nine major cities in Canada and eight state capitals in Australia.
Findings show that pre-Game construction employment grew by 1.7 per cent in Sydney, 4.3 per cent in Vancouver and 3.9 per cent in Atlanta and Salt Lake City.
Having said this, it is not uncommon to see local companies and organisations jump on the proverbial Olympic bandwagon, and take full advantage of all the attention which the Games attract, to shine some of the mega spotlight onto themselves.
An example is Country Life magazine, who has launched a PR campaign for the magazine, to portray the UK as a ‘green and pleasant land’, following the London 2012 Olympic Opening Ceremony.
The IPC Media magazine will feature Rural Britannia, a celebration of the British countryside in Country Life and online at countrylife.co.uk.
The analysis conducted by Zoopla shows that, when it comes to house prices, having Gold, Silver or Bronze in your property address ranks in the same order as they do on the Olympic medal podium.
The average property value on streets in Britain with ‘Gold’ in the name currently stands at £280,114, compared to £224,786 for streets with ‘Silver’ in the name and £198,537 for ‘Bronze’.
The company claims that, just like the metals, not only are ‘Gold’ streets more valuable but they are also far rarer than those with ‘Silver’ in the name. Apparently, there are 61 residential streets in Britain with ‘Gold’ in the address compared to 559 ‘Silver’ streets across the country.
It should be interesting to see, as the date to the Games gets closer, how other property portals and/or businesses associated to the local real estate market, tap into the magnetic force which are the Olympics, to bring more business their way.