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What positive affects could the Olympics have on property in Rio de Janeiro?

Date added: 15th September, 2010 at 14:21
(view all articles from September, 2010)

Categories: Property News, Rio, Olympics 2016

Brazil will be hosting the Olympic Games in 2016 and preparations for the competition have led to investment in its capital city, while evidence suggests the event could have a positive impact on property in Rio.

Writing for the Daily Reckoning, Mark Geoghegan asserted the areas most likely to benefit from the sporting contests are those which are undeveloped or poorer, rather than rich Western urban spaces.

"Developing cities have more to gain in terms of promoting awareness of the city as a tourist or business location," he explained.

Athens and Barcelona both experienced massive price increases in real estate, he said, while the expert, who was writing before the Beijing Games, predicted foreign investment would flood into China when the city held the tournament.

Indeed, towards the end of the Olympics in the Asian Country, executive president of the Beijing Olympic Economy Research Association Chen Jian told reporters he expected the value of property to be boosted by the competition.

"The city has a huge demand supporting the price of the housing in Beijing," the expert said. "That is why I believe after the Games the price of the housing will go up."

Two factors are involved with the positive affect of the sporting event on the worth of real estate, the specialist noted.

Firstly, wider economic development plays a part - with gross domestic product in China jumping over $3,000 to $8,000 per capita, Mr Jian stated.

Secondly, investment in infrastructure - such as railway lines - sees house prices increase near transport links.

Indeed, a new high-speed bullet train is planned to connect Rio de Janeiro and Sao Paulo, Reuters reported recently.

President Luiz Inacio da Silva is hoping to have the infrastructure completed for the Olympic Games and the project is attracting foreign investment, with companies from countries including Japan, France and Germany all expressing interest, the news provider asserted.

The development of the railway could be a good move for Brazil, as a recent report by Jones LaSalle posited that the opportunity to "influence the pattern of urban development through investment in infrastructure and environmental improvements" constituted a significant long-term benefit of hosting the competition.

Entitled Reaching Beyond the Gold: The Impact of the Olympic Games on Real Estate Markets, the study noted the event has a short-term impact on tourism and the hotel industry.

Meanwhile, the sustainability of the long-term benefits are dependant on the city's ability to continue delivering the positive image created by the Games after the athletes and spectators have left.

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