Remember all the hype about the Olympic effect on property prices?
The mere fact of being in vaguely the same part of the city as the Olympic stadium was supposed to make a property instantly desirable - and any sign of prices rises were leapt on estate agents and property pundits as evidence of the 'Olympic effect'.
As with most aspects of the Olympics, other explanations were ignored - such as the unexpected cut in interest rates around the time of London winning the bid in 2005, and the fact that the Olympic boroughs were relatively cheap - and prices across London were on the rise.
Now Bloomberg has reported that far from booming, the areas nearest the Olympic site are blighted - with prices falling and the overall rise of 19% since 2005 lower than the rest of London at 27%.
Investors who jumped on the Olympic property bandwagon through O-Twelve Estates - hoping "growth in value will be stimulated by the regeneration initiatives and investment, both public and private, planned particularly for the area in and around Stratford, east London, in the build up to the Olympic Games in 2012." as the prospectus promised, have been left wondering where it all went wrong.
Savills PLC, who have the job of marketing the Olympic Stadium, Media Centre and Athletes Village - offer the reassuring insight that "The north-south divide opening up in the country as a whole actually is an east-west divide in London" - which we've all been told was exactly what the Olympics was supposed to change.
This is what they call 'convergence' - property-led regeneration that reduces social housing, pushes up prices, displaces the less healthy and wealthy from the area, replaces them with new well-educated, high earners and bingo, your indicators of deprivation look a whole lot better.
However “The impact of the Olympics on the international psyche has yet to happen as the games haven’t happened yet”. There is still time to sell the area off to bargain hunting foreign investors after rental yield, which is apparently a Good Thing. This has already happened with the Athletes Village and Westfield.
And Clive Dutton OBE, Newham's £212,000 a year Executive Director for Regeneration, Planning and Property, insists home values near the Olympic Park will rise after the construction on the site is complete - and of course when the Westfield shopping centre is open. But since the Olympic zone is likely to be a building site for the next 20 years, this could be a long wait. The non-property owning masses may survive in the area for a little while longer.
Submitted by Charles Batsworth on Fri, 02/09/2011 - 17:33.