Wednesday, January 27, 2010

Olympic Bounce?

Hmmm, what a surprise.

Seems that Tsur Somerville, a professor in real state estate at the University of British Columbia, has just poked a hole in the Olympic R/E speculative bubble.

In a recent study Somerville analyzed house prices and construction employment in the years leading up to and after the Olympics in Australian, Canadian and U.S. cities.

The conclusion?

Cities that win Olympic bids experience neither boom nor bust in real estate prices but they get a boost in construction jobs.

"We do not find support for the argument of host city backers that the Olympics delivers positive economic benefits, nor of the arguments made by opponents that there is some post-Olympic bust," Somerville said. "Our results conclusively demonstrate that while construction employment dramatically increases in the period prior to the Games, house prices are the same as they would be in the absence of the Games."

The study comes as the second slap in a double whammy of bad news for speculators.

Last week we heard how all those who loaded up on real estate in hopes of capitalizing on renting out during the Olympics are finding that their units are sitting empty, both in Whistler and Vancouver.

And now the anticipated land rush after the Olympics is being exposed as a myth.

Who could of known?

Guess the government should compensate them, eh?


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