Property investors cashing in on Olympics

Professional investors have been cashing in on the upcoming Olympic Games in China, selling investments and looking for the next big property hotspots.

According to research from HiFX, enquiries for property purchases in Beijing increased 112 per cent in 2004 (from a base of almost zero), 60 per cent in 2005, 21 per cent in 2006 and 11 per cent in 2007.

However, in the first six months of 2008 enquiries are down at three per cent.

This decline in enquiries as the Games approach suggests those buying in China were professional investors who were quick out of the blocks, argues HiFX.

"However the growth in Beijing's property prices peaked in October 2007 at 15.1 per cent and has been steadily slowing to 12.4 per cent in May 2008 in line with national property statistics.

"Therefore professional investors are now looking elsewhere," said Mark Bodega, director at HiFX.

Historically, property prices in all of the last four Olympic host cities have outperformed their national markets. Before the Barcelona Olympics property prices rose 49 per cent more in the city than in the rest of Spain, according to Halifax.

Outside of the Olympics some traditional property trends are also being eroded.

Interest in emerging markets such as Brazil and Panama is increasing while enquiries for traditional destinations such as Spain and Italy are waning.

The distribution of enquiries points towards professional investors rather than holiday home buyers in this climate.

As well as emerging markets fuelled by interest from investors, the hotspots report also reveals a steady increase in interest in the US.

This is attributable to the weakening dollar which means British buyers’ pounds go a lot further in America than they do in Europe, where the strong euro is pricing many holiday home buyers out of the market, along with falling US property prices.

Chris O'Toole