Can you win Gold in Brazil
Published October 2009
The $64,000 question is “what affect will hosting the World Cup and the Olympics have on property prices in Brazil?”
The situation is unique, to host 2 such prestigious events in relatively short succession is unprecedented and brings to the table the possibility of a double bounce in property prices.
Reaching Beyond the Gold: The Impact of the Olympic Games on Real Estate Markets' A report from Jones, Lang, Lasalle examines the impact of staging the Olympic Games on property prices in the recent host cities and looks ahead to 2012. They argue that an important effect on property prices of staging the games is the improvements and investment that occurs in the urban infrastructure in particularly in developing Cities. This investment can have a significant impact on property prices, Athens for example when it began building a new airport to the east of the city it sent land and property prices in the Messogia area soaring.
The effect on property prices is less clear for more developed cities such as Sydney where most observers believe that staging the Olympics had some effect on property prices, the fact is that making money in these areas is more about regeneration than the Olympics.
In Sydney, Michael Bounds of the University of Western Sydney published a paper on the Games’ impact on the property market. His findings? South Sydney, another area undergoing regeneration but far from the Olympic stadium, saw prices rising significantly faster than in the Olympic corridor in the run up to the games.
So infrastructure development seems to be the key and Brazil is planning major renovations and the upgrading of airports around the country, along with investments in new transport networks such as the high speed trains between Rio de Janeiro and Sao Paolo. Modern infrastructure developments have so far only been carried out in the north-east, where recent interest in tourism and real estate investments have been attracting strong influxes of European and North American investors.
These Infrastructure investments will provide long awaited upgrades around the Country, bringing about significant improvements and construction projects. All of this investment may further fuel the growth in tourism and the economy as well as strengthening the awareness of Brazil to property investors both from abroad and from the growing prosperity of emerging middle class in Brazil.
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