Sochi, the host city of the 22nd Winter Olympic Games, is already seeing benefits to its property sector as the world’s spotlight falls on the south west Russian resort city.
Perched on the Black Sea coast, Sochi is one of the few areas of Russia to enjoy a subtropical climate, meaning it has long been one of the country’s most popular destinations for holidaying Russians. Thanks to the huge investment and considerable excitement resulting from the Olympic Games, Sochi is looking to take its place on the global tourism and property stage.
Located as far south as Nice on the French Riviera, Sochi’s balmy climate and palm tree-lined walkways make it one of the nation’s most attractive cities. It is often dubbed "the St Tropez of Russia." A plethora of cultural attractions and delightful parks add to Sochi’s charms, as do the world-class sporting facilities that the Olympic development – the largest construction project in post-Soviet Russia’s history according to The Economist – has provided.
The impact of the Olympics on Sochi’s property market has already been noticeable. From Russians looking to purchase second homes, to tourists wanting rental property during and after the Games, Sochi is the hot property location in Russia at the moment.
While interest has been steadily rising over a number of months, it has rocketed in the last few weeks. Russia’s leading property portal Idinaidi had reported a significant increase in searches for Sochi property on its site during the past several months, with a 177 percent increase in the last month alone.
Idinaidi‘s Chief Operating Officer Carlo Walther said: “The Olympic effect has been dramatic, with both domestic and international property searches booming over the last several months. Sochi has some fabulous new developments, as well as more traditional Russian properties, so they city has something to suit every taste and budget."
Looking back to the London 2012 Olympic Games, the long-term effect on property prices is clear. Data from Lloyds TSB showed that property prices in the 14 postal areas closest to the Olympic Park rose by an average of £92,000 between 2005 and 2013 – representing an astonishing 45 percent growth rate.
It’s a trend that Idinaidi, as Russia’s fastest growing real estate site, is seeing replicated in Sochi.
Walther said: “We’ve seen in London that house prices in the 14 areas closest to the Olympic Park have risen by an average of 10 percent since the Games were held. This is one of the reasons that there is so much interest in Sochi currently, as well as during the past several months. This is not only for the rental opportunities arising during the Games, but also for the capital gains to be made in the years following."
With more than 8,500 apartments, 400 houses and 200 plots of land listed – apartments being by far the most popular form of accommodation with Russians – Idinaidi is excited to see the impact that the Olympic Games are having on Sochi’s property market.
As a portal covering the whole country, the company is also interested in the effect that the Olympics are having on the wider sector. With the private property market still in its infancy in Russia, each year brings new developments. 2013 saw some 4 million private transactions take place and almost 2 million properties built. This year’s figures promise to be equally fascinating.
With the world’s eyes on Sochi over the coming weeks as Olympians showcase their sporting abilities, it is perhaps the underlying story of Russia’s emerging property market that will be the ultimate winner.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
Recent stories you may have missed:
CDL boss urges government to tweak cooking measures
Claims of bubble bursts in Australia
Weak baht is attracting buuyers to Thailand
Four-and-a-half year low for resale flats COV
If you have a property story you want us to publish email: andrew@propertyguru.com.sg