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Johannesburg - Property prices in the vicinity of Olympic Park in London have not seen the anticipated revival.
Despite huge hype prices in Stratford - to the east of the
area where the Olympic Games begin later this month - have underperformed, as
indicated by a report by residential market analyst Hometrack.
According to the report average values in Stratford in 2001
were 30% to 35% below property values in the Greater London area. In 2006, the
year when London’s bid for the games won, this gap shrank to between 10% and
20%. It has again swelled to 35%.
House prices in the British capital have nevertheless fared
well and, according to Land Registry data, prices in the Greater London area in
April this year were 5.1% higher than the year before. In Newham, where Olympic
Park is situated, growth of 2% year on year has been measured.
Mike Smuts, managing director of Smuts & Taylor, says
this contrasts with Kensington and Chelsea, where prices leapt 11.6% as rich
investors streamed to London as a safe haven for their wealth. Smuts &
Taylor is a South African investment firm that specialises in helping South
Africans buy property in London.
Smuts says although there has always been a difference of
opinion about the impact events like the Olympic Games can have on property
prices in the host city, research confirms that they have no effect on a city
like London.
But what is beneficial for future house-price growth is
investment in infrastructure. “The positive legacy of the Olympic Games will
therefore arise from the infrastructure upgrades rather than the event itself.”
This was also the case in South Africa with the World Cup Soccer tournament.
The infrastructure upgrades include the £6.5bn investment in
London’s transport system, as well as a £1.5bn investment in the Westfield
shopping centre in Stratford.
According to Smuts the average rental in Greater London is
currently £1 177 a month, 7.9% more than last year.
A graphic representation of the new Providence Tower
development in London’s Canary Wharf, which is being marketed by Smuts &
Taylor. Prices start at £260 000 and the investment is expected to produce a
gross rental yield of between 5% and 6%. The building is under construction and
will be completed by the end of 2014.
The Pan Peninsula residential development in London’s Canary
Wharf.
- Sake24
For more business news in Afrikaans, go to Sake24.com.
