Olympics Likely to Benefit Housing Market
What affect will hosting the 2010 Winter Olympics have on the City of Vancouver? That's a question that many of us are asking ourselves. Billions of dollars are being spent on a two week event that many have questioned. Will it be worth it?
According to a report by Jones Lange LaSalle entitled "Reaching Beyond the Gold: The Impact of the Olympic Games on Real Estate Markets" Olympic host cities benefit in the long term from the event. The paper reviewed four recent Olympic hosts to reach it's conclusion: Seoul, South Korea, Barcelona, Spain; Atlanta, USA; and Sydney, Australia.
We should note that these conclusions were reached looking only at recent Summer Olympics hosts. There were no Winter Olympic host cities reviewed, but I think that we can still take away some valuable lessons that can be applied to Vancouver.
The primary benefits that are highlighted in the paper are urban regeneration, infrastructure improvements and publicity. In the case of Vancouver, we have seen all three of these impacts on our local real estate market as a result of hosting the 2010 Winter Olympics.
The community being developed as the athlete's village was until recently a warehouse district on the edge of the downtown core. It had been under-utilized for a number of years. After the Olympics this community will eventually house over 16,000 residents in a modern, sustainable community.
One of the largest legacies of the 2010 Winter Olympics will be the infrastructure improvements to the region. Many of these projects may have not been developed for years if it weren't for the Olympics coming to the city. The Convention Centre, Sea-to-Sky Highway improvements, Canada Line skytrain extension, and the variety of Olympic venues will all benefit the region long after the Olympics have come and gone.
Publicity is another major impact of hosting the Olympic games. Host cities tend to see marked improvements in tourism long after the closing ceremonies. The eyes of the world are watching and the host city's attributes are highlighted for all to see.
The report notes that not all Olympic host cities see residential property values increase as a result. It indicates that more mature housing markets (such as Atlanta and Sydney) see less in the way of price increases as those seen in less mature housing markets (such as Seoul and Barcelona). I think that the authors of this report would argue that Vancouver would see little in the way of residential price increases as a direct result of its status as host of the 2010 Winter Olympics.
It is still too soon to tell whether hosting the 2010 Winter Olympics will have a positive longterm affect on Vancouver. However, given the experiences of recent Olympic host cities, and the fact that the major Olympic projects have been completed (other than the Olympic Athlete's Village), it does appear likely that Vancouver will see longterm benefits...and particularly in the residential real estate market.