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
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