Who wins the property investment Olympics?

Who wins the property investment Olympics?
24 July 2012

LONDON, Beijing and Tokyo have scooped gold, silver and bronze medals for property investment potential in a study of cities that have played host to the Olympic Games in the past.

As the London 2012 Olympics get ready for the starting pistol, property investment company IP Global identifies the United Kingdom capital as providing the strongest opportunity for investment, promising low-risk and high returns for investors.

Beijing, which staged the last Games in 2008, and Tokyo, which played host in 1964, take silver and bronze medals for being interesting cities to watch.

However, Athens, which held the Olympics in 2004, and the US city of Atlanta, host in 1996, are ‘disqualified’ from the running due to disappointing performance and an uncertain economic outlook.

Let’s take a closer look...

LONDON

Host to the 2012 Olympics, London takes first place, earning a gold medal as the best place to invest in property, with rises of up to 3.2% in sales prices during the first quarter of 2012 and year-on-year increases in rental prices of 1.5%.

This should come as good news for Middle Eastern investors, as they have continued to favour London as their primary investment choice, according to IP Global.

Strong price rises and increasing rental yields consolidate London’s status as a ‘safe haven’, and the Knight Frank/Markit’s house price sentiment index shows it to be at a 20-month high.

Robert Pearce, Middle Eastern director of IP Global and a member of team cashy, says: “London has always been the most attractive destination for property investors from the Middle East, and I’m pleased to see it has continued to yield excellent returns on investment.

“We have been advising our clients on investing in a variety of different opportunities throughout the UK, from student accommodation to luxury properties, and they have all been extremely satisfied with the returns on investment.”

BEIJING

Host of the 2008 Olympics, Beijing is ranked as a city to consider, with a 30% increase in sales volumes this year.

Initiatives by local government in China to stimulate growth have had a positive impact on sales. In addition, since February 2012, commercial banks in Beijing have been offering mortgages to first-time buyers at or below the benchmark rate, which has boosted demand.

TOKYO

Host to the 1964 Olympics, Tokyo has had a rough ride with a spate of recent natural disasters. In spite of this, Tokyo skates into third place and has been selected as one to watch thanks to strong domestic demand and positive indicators for the Japanese economy.

Expats may have fled the country following the 2011 earthquake, which affected the luxury market, but the leasing market has remained stable and overall Japan’s economy is forecast to grow by 2.2% this year.

ATLANTA

House prices in Atlanta are now at the same level as they were in 1996 – the same year Atlanta hosted the Olympics. US house prices are down 32% overall since the peak in 2007, while Atlanta, the capital of the US state of Georgia, and the most populous city in the US, has seen house prices continue to fall, with the median sales price dropping by 15% in 2011.

Despite being home to world headquarters of the Coca-Cola Company and other major international corporations, Atlanta is disqualified from the property Olympics this year.

ATHENS

The birthplace of the Olympics last hosted the Games in 2004. Greece’s financial woes of late and fears of a ‘Grexit’ from the Euro have surely contributed to its disqualification from the top spots for investment.

The Greek capital, Athens, now ranks last among all 27 European metropolitan cities in its ability to attract real estate investment, is viewed as high risk and shows no signs of recovery in the short term.

Pic credit: freedigitalphotos.net

Are you a property investor? Where do you think is going for gold?

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Freelance editor and journalist
mediahill Ltd
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