The intent of this thesis is to analyze the 2012 London ‘s Olympic Games and deduction it caused on the belongings market within East London country. The paper delivers an country and substructure development overview, economical and ecological analysis, and shows both the advantages and disadvantages of hosting the games.
“ Economic Impacts of Olympic Games ” study 2009 by PWC stated that national and international acknowledgment of the host metropolis through extended media exposure ; community benefits including occupation creative activity, preparation and instruction plans ; funding for community economic development undertakings and cultural plans ; substructure benefits ; new company investing in the metropolis, and increased trade ; and lodging impacts is huge are expected to be achieved after the terminal of the Olympics. Additional plans for regeneration of East London include creative activity of green infinites and a new energy Centre in the West of the Olympic Park to back up London 2012 committedness to utilize renewable and energy-efficient engineering, and low-cost lodging. The benefit from extended investings in conveyance substructure will do it ideally connected both internationally and locally.
The reaching of DLR and the Jubilee Line has made a immense impact on regenerating East London. Further, Crossrail – Stratford to Heathrow, Eurostar International Station at Stratford, City fiscal developments and Canary Wharf office infinite enlargement will do a significant part. With its first-class conveyance links, the country is a regeneration hot spot and has positive impact, which the London Olympics aid making. A location that sees a regeneration and development for the better is likely to pull strong demand and see monetary values lifting well. The money started traveling in and monetary values have rocketed and still anticipate a possible growing after a residential and commercial development emerging until 2020. The extent of impact on house monetary values appears to be dependent upon the size of the lodging market in the metropolis.
The Olympic bequest is that after the games, East London will have face lift ; a big park and the jocks ‘ small town will go at least 5000 places. Many of the cardinal investing countries within one time black East London are likely to be positively impacted by new substructure developments in the old ages to follow. Despite the recent planetary fiscal recession a rapid recovery is shortly expected with belongings monetary value addition in East London get downing 2010 and onwards. ( PropertyInvesting.net squad, 2009 ) London is likely to remain a important planetary fiscal Centre that provides comparatively high paid employment.
Chapter I
Introduction
“ The ‘legacy ‘ of the Olympic Games will be manifold. Many countries of London and other parts of the UK and the lives of 1000s of persons will be touched by the Games. There will be many intangible benefits, and a important consequence on the repute of London enduring for decennaries ” . ( Traveling for Gold: Conveyance for London ‘s 2012 Olympic Games, 2006 )
The primary and secondary research of East London ( Newham ) regeneration agreements was conducted, and the findings provided valuable information for the context of this survey undertaking. For the intent of the paper a instance of Barcelona Games and their influence on belongings market and country profile was used, showing the correlativity between Olympics and the belongings market in Barcelona in 1992 and will pull likeliness analogue. The instance aimed to supply the experience and deductions of hosting of major universe event. The survey examines anticipated benefits for the existent estate position. It besides profiles the impact of hosting the Games on the office, retail and residential sectors.
1.1 Background
The planning and readyings for the 2012 Olympic and Paralympic Games in London have already generated a important activity. The coming old ages expect even more intense action towards the bringing of the 2012 Games – the regeneration programs for a big figure of urban green infinites and upgrading of comfortss in the country. The Olympic bequest is that after the games, Stratford high street will have a 10 million lb face lift ; a big park and the jocks ‘ small town will go at least 5,000 in private owned and low-cost places. This research undertaking was set up to develop an analytical model for look intoing and describing the impacts from the Games, concentrating on East London belongings market, both now and in the hereafter – station Olympic period. One of the cardinal aims is to be able to show and understand the impacts on people, communities, the economic system and environment.
1.2 Rationale
The bing surveies have explored the relationship between Olympic Games, the planned regeneration of the country and belongings values. However, few have looked at the relationship between Olympic Games and desire for people to put and relocate to this portion of the metropolis. It is hoped, hence, that, at a higher degree, this paper shall do a part to a field of research, which has been small studied, but which doubtless has deductions for contrivers, concerns, investors and the local population. It should, nevertheless, be noted that Olympics are ne’er held in the same state twice, therefore building anticipations based on the old instance surveies should be made with attention, and take into history that all positions are simply bad as Olympic development is yet to be completed in London.
1.3 Aims
The aims of this thesis are ( 1 ) to indentify and analyse influence of factors such as Olympics development, ( 2 ) hard economic clime and exchange rates fluctuations, and ( 3 ) explore the effects of regeneration features on belongings market in the country. In order to prosecute these aims, a elaborate literature reappraisal of old researches, including bookmans, was carried out, every bit good as an analysis of the economic state of affairs at the clip the Games were announced and the present. Several instance surveies were looked at and auxiliary secondary information was besides used in order to understand the grounds behind London ‘s command for the Olympics 2012.
1.4 Research Questions
The undermentioned inquiries are to be answered:
Understand the residential market in East London and whether the development of the country with Olympic games being held in 2012 will do it possible to see likely tendencies?
Could the position on Olympic games as a “ accelerator for presenting sustainable communities and low-cost places transform East London ” live up to outlooks?
Is London ‘s program to utilize the Olympic Games to re-urbanize its eastern suburbs realistic?
1.5 Scope
The limited clip frame of this undertaking has necessitated a focal point on specific country of East London. This research survey is concentrating on the belongings market of the primary location of Olympic Games. As the belongings industry is a critical constituent in the UK ‘s economic system the range of this paper is to analyse the East London borough in order to place whether there is any grounds to propose that the Olympic Games have an consequence upon residential criterions of life, desirableness and belongings monetary values within the same vicinity.
1.6 Structure
The study is structured in a manner in which foremost, the aspiration and coveted bequest is briefly described. Aspects related to the belongings impact will non be considered at this phase, but instead, demographics can be portrayed in footings of population, instruction, employment and socio-political benefits as a base to what will fundament the primary research.
The survey so moves on to the apprehension of the belongings industry. This portion covers an overview of recession and concern involvement in the future belongings market of East London. The analysis continues with an scrutiny of the regeneration of the country and belongings figures as cardinal enablers of the economic growing. Alongside, the analysis will include the positions of economic experts, concerns and persons ‘ chief motives for taking antecedently economically disadvantaged country for their investing and resettlement.
All findings derived from literature research, analysis and sum-up of questionnaires are presented in the decision. Having an apprehension of the current state of affairs will let investors and other interested parties to hold the clear image that will surely assist to do determinations whether investment/relocation will be the right move for the hereafter. The restrictions and recommendations are to follow in the last subdivision of this undertaking.
Chapter II
METHODOLOGY AND RESEARCH
2.1 Research Approach
Given that the topic requires observations, statistical Numberss, and the expert ‘s sentiment in the industry for carry oning a thorough research and analysis, the methodological analysiss used for this undertaking were based on a qualitative research largely based on the sentiment of economic experts, belongings market analysts and journalists who can depict the Olympic events, its societal environments and the impact on the belongings market.
In back uping this undertaking the informations aggregation involved the usage of both primary and secondary informations research. The primary information was collected in the signifier of questionnaires that were answered by east London belongings market professionals ; these treatments were focused on the Olympic developments, explore the strategic booby traps of regeneration form their experience and reappraisal of future market anticipations. The primary research consisted in formal interviews to assorted persons working as full-time employees in varied countries of belongings market, such as gross revenues, research analysis, and developers, provided insightful positions about the country of regeneration.
Furthermore, a instance survey attack was chosen as the research method, as it “ investigates a modern-day phenomenon within its real-life context and references state of affairss in which the boundaries between phenomenon and content are non clearly apparent ” . ( Meyer, 2001 ) This manner the research benefited from combination of assorted degrees of analysis: informations aggregation methods such as observations, interviews, questionnaires and archives. ( Eisenhardt, 1989 ) It besides allowed bring forthing replies to inquiries like “ why ” and “ how ” . ( Saunders et al. , 2009 ) The information aggregation was conducted in a signifier of unfastened inquiries, nevertheless, due to the nature of the facts revealed, the participants individualities were agreed to be confidential.
For the digest of secondary informations, extended literature reappraisals of the existent estate industry were done. For this intent, assorted informations was sourced from bing market analysis, such as: market and governmental organic structures studies from assorted literature publications and on-line resources, including Google Scholars, related books, concern and industry studies via the EBSCO database. The focal point was made on overall market public presentation in the UK and consumer behaviour forms in old Olympic hosts. Additionally, a assortment of articles in the FT, Mintel and industry studies were reviewed to look into the UK belongings market industry and its present and future tendencies. Other articles based on single reappraisal of authors in newspapers and periodical diaries were mentioned within the literature reappraisal.
2.2 Primary Data ( Qualitative Research )
2.2.1 Data Collection
Qualitative primary research was undertaken through informations aggregation from a figure of in deepness questionnaires given the explorative nature of the undertaking. The primary qualitative informations attack was chosen as it provides more descriptive textual information of parties ‘ sentiments and informations collected this manner by and large is a better tool for depicting and understanding a phenomenon. ( Weston et al, 2001 ) The questionnaires allowed interviewed public for greater clip in sing their replies and encouraged a free look of positions within respondents ‘ ain frames of mention. The questionnaire ( Appendix A ) consisted of a standard figure of inquiries for each respondent with the shutting inquiry: “ Would the involvement for east London belongingss, in peculiar Stratford, addition after the 2012 Games? ” – the inquiry of the chief involvement of the research. It will show the professional position for resettlement and investing desirableness in East London.
Seven questionnaires contained 12 inquiries and were sent to the undermentioned parties:
Executive employees within existent estate bureaus
Property market analysts
Private Developers and enterprisers
Real estate industry adviser.
A scope of respondents presented a all-around sample of positions.
2.2.2 Data Analysis drumhead reappraisal
Based on the questionnaire the most often mentioned factors were drawn and the effects are discussed below sum uping the point of views of existent estate professionals and belongings investors.
The demographic state of affairs in East London country at present is low to mid income persons and households, with a greater figure of pupils based within the University of East London country. Since the games were announced in 2005 belongings monetary values rose by approx 10 per cent virtually nightlong. Further they have ebbed and flowed with the remainder of the London belongings market, with no important upheaval as yet. The state of affairs has non stabilized, as recession influenced the purchasing ability of clients tremendously. Large sedimentations require by loaners have stymied the market. Reasons for purchasing in the country at the minute, two old ages before the Olympics, is chiefly investing, as in the mid to long term it should see a important capital grasp on the belongings. The anticipations are based on the fact that in general ‘Olympic consequence ‘ has non yet taken topographic point and, for case, Stratford belongingss are one of the cheapest countries to purchase in London. Post Games investings should see the rise through the ranks to go reasonably sought after, therefore in twosome of old ages after the Games it is likely that people will be looking to populate in the country for its comfortss, life style and what will be – superb installations. Buy-to-live buyers will take the country because of shopping, bars, eating houses, athleticss installations, Parkss, new schools etc. There are, nevertheless anticipations, that East of London might see the station Games slack in the belongings monetary values, particularly for modern manner flats, due to high supply of new belongingss onto the market.
Shoreditch and Hackney are closer to the metropolis and have a higher proportion of big lodging stock. The demand for big houses besides increases the demand for better bars, eating houses, etc. , which so further lead to the increased desirableness of the country. Stratford has smaller belongingss and though the new substructure is being constructed, none of it is yet unfastened or in usage. Once it is, the monetary values will be probably to lift consequently. Olympic consequence on quality of east Londoners ‘ life should better greatly, nevertheless it will take topographic point merely in the mid-long footings, when Parkss, shopping, schools, featuring installations are transformed and complete in twelvemonth 2014. That is the clip when professionals predict the addition in involvement in East London belongingss. Socio-political clime will potentially better in the hereafter. It is though improbable in a short term to pull a higher income families, as they have more freedom to take where they wish to populate. A vicinity, at the same clip, will offer a scope of brooding types by size, constellation, term of office, design and monetary value, suiting families of lower incomes with a topographic point to get down and acquire into the belongings ladder. It is expected to hold an tremendous figure of first-time purchaser to be traveling into the country and immature households, and professionals, who will relocate for cordialities of the country with its bars, eating houses and shopping, and good conveyance connexions.
2.2.3 Findingss and Decision
To sum up the questionnaires it has to be said that house monetary values arguably influenced by the Olympics are expected to lift at least 5 per cent faster per annum than the UK market by and large. Although many territories near to the Olympic Park have already seen 10 per cent house monetary value growing, Stratford is the exclusion. It is predicted that the monetary values in E15 will probably to turn in the long term, because the country socio-political clime is improbable to better over dark. Despite the slow rise in the monetary values, the country sees adult involvement from investors. Further, most of the professionals who took portion in the research agreed that the country is most likely to be popular among first-time purchasers, as the monetary values near Olympic Village are still lowest in London.
2.3 Secondary Research ( Case-Study )
2.3.1 Urban Transformation of Barcelona
Prior to 1992 Barcelona ‘s coastline was one of the least desirable territories of the metropolis, full of obsolete warehouses and dilapidated industrial land. A premier ground for the command to host the Olympics in 1992 for Barcelona was the demand for a accelerator to hike the local economic system of the Catalonia. The part was in despairing demand of a major urban regeneration. The greatest bequest achieved in Barcelona was the entire makeover of country go forthing Olympic Village seafront – one of the most coveted belongings locations. All these factors significantly affected superior belongings monetary value growing in house monetary values – with more than a three times increase in house monetary values during the six old ages prior to 1992. The Mayor of Barcelona: “ The Olympics was the large alibi to alter Barcelona ‘s place in the worldaˆ¦before, it was an industrial metropolis. Now it is a metropolis of cognition, a planetary metropolis. ” ( Slot, 2008 )
Support: Barcelona adopted a assorted public/private sector theoretical account with the authorities financed about 65 per cent of the entire cost ( 5.3 billion US Dollars ) of the Games. ( Brunet, 1995 )
Economic Impact: The Games are estimated to hold generated the greatest economic benefit, adding 16.6 billion US Dollars to the Spanish economic system in seven old ages, between 1986 and 1993. ( Sanchez, Plandiura, Valino, 2007 ) Investing in the country helped cut down Barcelona ‘s unemployment rate from 18.4 to 9.6per cent in 1986 and 1992 severally. ( Autonomous University of Barcelona, 2007 )
Urban impact: The revival of progressively creaky urban countries was an expressed purpose of the Barcelona Games. The development of Olympic Villages was a cardinal portion of the regeneration – urban centres were constructed, including non merely lodging, but besides back uping retail, other community installations. While mostly utilizing bing substructure, some extra installations were built, e.g. shopping promenade. ( Brunet, 1995 )
Infrastructure: Another major benefit is the opportunity it offers to develop new substructure undertakings from which the host metropolis benefits long after the Games have moved on. The most obvious add-ons are new bowl and other installations built specifically for the Olympics, and bring forth on-going income for metropoliss through the attractive force of subsequent major featuring events. ( Slot, 2008 )
Real estate: Construction activity that upgraded the lodging stock, tenancy rates, leases and monetary values had the major impacts on existent estate markets. Barcelona experienced rapid additions in lodging monetary values and leases in their several Olympic old ages. The impact on the residential market was pronounced – the Olympics cited as a major subscriber to additions in residential values of between 250 and 300 per cent over the period 1986-1993. The residential building increased by 23 per cent between 1988 and 1991, compared to additions of 5 per cent in the hotel and 12 per cent in the office markets. ( Reaching Beyond the Gold, 2001 )
The supply of lodging: Between 1986 and 1991 a important sum of residential building took topographic point in Barcelona, although this addition was non changeless. The sum of lodging for sale decreased, even though the edifice sector was in enlargement. The supply of newly-constructed houses during the period experienced a cumulative addition of 101.5 per cent. From 1993 onwards, the economic recession had a rough consequence on the edifice sector with decrease of 34 per cent in the sum of lodging for sale. ( Reaching Beyond the Gold, 2001 )
The monetary values of houses for sale and to lease: From 1986 to1993, there was a 139 per cent cumulative addition and additions in lodging monetary values were more reticent ( 2 per cent addition in 1993 ) . Between 1986 and 1993, there was besides a 144.5 per cent addition in rent, which remained high in consecutive old ages until 1993, when rents started to diminish. ( Sanchez, Plandiura, Valino, 2007 )
Office Market: The Olympic divine economic roar of 1986-1990 led to a major addition in building of office infinite – about 850 1000s square metres was built. However, the office market peaked in 1991, with leases worsening by about 50 per cent influenced by increasing supply, but by 1994 the market one time once more reached equilibrium. ( Sanchez, Plandiura, Valino, 2007 )
2.3.2 Decision
The Olympics represented the beginning of a new metropolis Barcelona, with the enlargement of its geographical boundary lines and the monolithic development of substructure. The new roads contributed to the addition of employment, retail and residential mobility and due to the nature and the size of regeneration of the undertaking between 1986 and 1993, Barcelona carried out the most of import urban alteration in Europe at the clip.
Chapter III
LITERATURE REVIEW
The hosting of an Olympic Games has a important impact on the Host City nevertheless, publication “ The environment and sustainable development update “ asks a valid inquiry: “ to what extent, with what consequences and with what benefits “ . ( International Olympic Committee, 2009 ) Most of the publications on Olympics and other major events that were researched are relevant in order to reply the chief inquiry of this undertaking paper, whether the regeneration of East London will do it attractive for people to relocate to, and will the likely tendencies follow. The chief topics covered in the literature are the economic impact of the Games on the metropolis and its deduction of consumer disbursement behaviour, betterments in substructure and conveyance that makes the country more desirable for people to populate in.
The literature reappraisal was conducted through research of academic diaries, chiefly found through Google Scholars, online database including Bloomberg, FT, Business hebdomad and other dependable beginnings. Number of books and publications were used to assist explicate the state of affairs of the belongings market and the factors that have important influence on the demand and monetary values of the existent estate. Furthermore, the publications of the Governmental organic structures: the International Olympic Committee, the British Olympic Association, the Olympic Delivery Authority and the Commission for a Sustainable London among others, every bit good as, Internet research, chiefly the EBSCO database, were accessed several times in order to happen any relevant and up to day of the month information to organize a footing for the solid argumentative analysis of the undertaking.
The economic downswing has affected every facet of concern market in one manner or another, and belongings market is non an exclusion. This impression drove a release of an huge sum of different information formats, including: articles, columns, web logs, web sites and printed publications. Merely some of this information is relevant to the research undertaking, therefore it is highly critical to pull out the relevant points of information required for the intent of this paper without traveling excessively far off from the set purposes and aims. After extended research two relevant publications were selected. The positions of PWC and Halifax estate bureau were used within this paper as to show the professional sentiment on the belongings state of affairs at the clip of the recession, present and in station Olympic period.
Furthermore, the PWC study examined several classs of impact in London: the socio-economic wellness impact, which takes into history how possible socio-economic development affect public wellness through degrees of income and occupation security, and on societal coherence, entree to lodging and instruction. Further, Olympics 2012 are believed to animate kids to “ take Olympic athleticss ” , advancing better societal environment, less adolescent offense. ( Price, Dayan, 2008 ) The above factors are important for the successful country regeneration and creative activity a household oriented clime, nevertheless these effects will merely be seeable in the long tally.
Research focused around the Olympics 2012 lodging market and the regeneration. A cardinal article that links strongly to the rubric of the undertaking is: “ Olympic Games Impact Study ” ( OGIS ) . ( PWC, 2005 ) The stuff has proven to be highly utile, incorporating a significant sum of information about the command and benefits of hosting the Olympics in London 2012. It defines the range of the possible impacts on societal, economic and environmental life. Section four of the paper that has chiefly been used and believed to hold high credibleness, dressed ores on the analysis of the environmental impact. It concludes: “ the overall environmental impact is expected to be significantly positive in the Lower Lea Valley during and after hosting the Olympics although there are some negative environmental impacts to be managed during the building procedure. ”
Academic survey “ Reaching beyond the gold: the impact of planetary events on urban development ” ( Vrijaldenhoven, 2007 ) trades with three types of planetary events, one of which is Olympic Games. “ Global events are used for legion metropolis jobs. These jobs can fall into assorted classs. Cities could, for illustration, be covering with rapid enlargement, a lessening in the figure of dwellers, a deficiency of tourer visits, or major infrastructural upset. Many metropolis authoritiess believe that these jobs can be solved by organizing a planetary even in the metropolis ” . ( Vrijaldenhoven, 2007 )
Indeed, “ The Mayor of London, through the London Development Agency, is puting in new substructure and in the redress, release and development of land for new industry and lodging. Through originative masterplanning and urban schemes, we will guarantee that regeneration will be sustained ” . ( Bishop, 2010 ) In fact, London ‘s five bequest committednesss that were set out by so Mayor Livingstone and after re-election since 2005 ; validated by Mayor Johnson are, as follows ( A 2012 bequest for London and Londoners, 2010 ) :
addition chances for Londoners to go involved in athletics
guarantee Londoners benefit from new occupations, concerns and
volunteering chances
transform the bosom of east London
present a sustainable Games and developing sustainable communities
show window London as a diverse, originative and welcoming metropolis.
The Legacy Masterplan Framework publication, 2009, highlighted that quality of life is cardinal to the wellbeing of Londoners and to pull capital.
All modern-day metropoliss need to turn to:
the manner they house their citizens
the relationship between conveyance and development
the quality and attraction of their physical infinites and
the manner they meet the challenges posed by clime alteration.
Vrijaldenhoven, farther in his work, discusses in inside informations the increased involvement of different states to be chosen to keep such event. It illustrates a position on the urban schemes metropoliss use when covering with planetary events, penetration into the character of planetary events and their impact on metropolis development, and past instances, such as Barcelona, that has proven to be a utile illustration for this research. “ The similarities are clear. London, like Barcelona, has in head an Olympics that will transform a big country of industrial barren ” . ( Slot, 2008 ) “ The Olympics was the large alibi to alter Barcelona ‘s place in the worldaˆ¦before, it was an industrial metropolis. Now it is a metropolis of cognition, a planetary metropolis. ” ( Hereu, 2010 )
London Olympics command for the Games 2012 highlighted the program to supply low-cost lodging for people ; in fact, the end of the authorities was to supply 50 per cent of low-cost houses for people in East London country – the centre of Olympic Village and the biggest regeneration in London of all time taken. Although, the betterments already taking topographic point show the likeliness of people to alter their perceptual experience and mentality on the country and its milieus, therefore, hiking demand, this is likely to force the monetary values to lift. Another issue with low-cost lodging mark is that it might be highly tough, about impossible to accomplish as the cost of the land in London country is expensive, particularly taking into history the current economic clime. If anything, figure of buildings has been dramatically reduced in an economic downswing. Many developers slow or halt their rate of constructing wholly as the border they are seeking to accomplish is squeezed by increasing land values, as a consequence, less low-cost lodging being built.
Although the statement above looks valid, the publication by Greater London Authority of 2008 provinces: “ the weakening market is likely to do a autumn in the figure of low-cost places being built. However, as development slows down throughout the industry the proportion of low-cost units being built in London may increase. ” Furthermore, because the population of Greater London is forecasted to spread out by 2015, most experts predict edifice demands to maintain up with this demand. ( Propertyinvesting.net squad, 2009 ) “ The combination of the market lag and the recognition crunch will impact some of the regeneration schemes taking topographic point across London more than othersaˆ¦Well established, desirable and/or premier residential countries are less likely to be affected by the softening market and the recognition squeezing due to the underlying strong demand in these locations… Areas associated with the 2012 Olympics will besides be less affected by the current market conditions, peculiarly the country around Stratford and the Lower Lee Valley. This is because these countries will be the focal point of the planetary media in four old ages clip and will offer developers the chance to demo instance what they can make. ” ( Greater London Authority, 2008 )
Many literature beginnings on East London and its regeneration show a drawn purchaser ‘s involvement. The country is progressively considered for residential belongings investing, as it is still a lower priced part that is in a close propinquity to cardinal London and metropolis East commercial boundary lines. Most of the biggest developments normally take topographic point in the degenerated and disadvantaged urban countries, where land is normally cheaper and the planning ordinances are non so tight and easier to follow, therefore more attractive for investors and developers. Therefore, relaxed authorities policies attract public or private development support, meaning to re-generate countries with the purpose to make a new environment, supply employment and better quality of life. The Olympic small town will convey to the market a big sum of new-built belongingss that are chiefly attractive for first-time purchasers, investors, immature households and metropolis professionals. Obviously, the alterations will in the long tally and make convey valuable change to the substructure of the country, but the literature fails to reflect on how socio-political state of affairs of the country is altering and how much consequence it will hold on lodging market, if any. Thus it could hold been helpful to see the analysis and comparing to similar instances to enable to do anticipations and to reflect on them in this paper.
Google Scholar proved to be a utile tool for happening academic diaries on the topic of this research paper. One of the highly utile publications by Adam Blake helped to pull the Fuller image about the economic impact of the Games. Blake ‘s work non merely concentrate on presentation of the positive influences, that are progressively discussed by the media prior the command for the Games, but gives negative yesteryear illustrations that needed to be acknowledged. “ Hosting the Olympics has non ever brought fiscal wages. The 1972 Munich Olympics and 1976 Montreal Olympics made losingss of 178 million Pounds and 692 million Pounds. The 1984 Los Angeles Olympics and the 1992 Barcelona Olympics made excesss of 215 million Pounds and 2 million Pounds. This increased economic public presentation of Games organizers, every bit good as the increased economic impact of the Games is due to a larger market, peculiarly for telecasting rights to the Games, but besides because the higher costs of the Games with larger rival Numberss and higher outlooks of the quality of Olympic locales has meant that forming commissions have had to warrant these costs and hence have been driven to increase grosss and economic impacts ” . ( Brown, Massey, 2001 )
It is the fact that planetary economic downswing had a negative consequence on the belongings monetary values and on people ‘s ability to purchase due to several factors, i.e. lifting unemployment, big sedimentation demands from money loaning establishments. Despite the fact that the UK as a whole is easy retrieving from 2009 – the choice of the crisis and concerns are get downing to do advancement and people are experiencing more money confident the “ UK Housing market is expected to worsen by at least 15 per cent during the following 2 old ages. London is expected to fall every bit much as 25 per cent. aˆ¦ The house monetary values are improbable to see a concluding underside until late 2011/early 2012 ” . ( Walayat, 2009 ) Many beginnings fail to reflect on the long term effects on Olympic Village belongings market, particularly sing the recent Budget cuts that will impact public sector employees and low to middle category households in general. It is hard to happen information that covers the predicted economic slack of the 2012. “ Merely when it looked as though loaning conditions were get downing to ease, the Bank is warning that we could confront a 2nd recognition crunch ” . ( Bien, 2010 ) If this happens, despite affordability of lodging and betterments in the country socio-political ambiance, East London is likely to see edifices empty, due to Banks and edifice societies lessening in loaning.
To reason, it must be said that there are many positions on the belongings state of affairs of East London in the following old ages, some highly encouraging, some are non so bright. There is no 1 position on the hereafter of the country, merely a weighing up of thoughts and guess. Most of the literature though has an highly positive overview, as it has chiefly been written to promote investors and pull general public involvement to the country. Some publications, such as newspaper articles from the Guardian and the Times have a batch of relevant information, to make full in the image, but were non of a peculiar usage for the paper. As it antecedently mentioned, a batch of information was printed when the Games were ab initio announced, therefore it chiefly has an highly optimistic mentality on the positions of the East London country regeneration, which might give a somewhat deceptive feeling. Area that sees a regeneration and development for the better is likely to pull strong demand and see monetary values lifting well in front. However, “ measuring the effects of mega-events, such as the Olympic Games, is a complex matter. The economic and societal costs and benefits for the host metropolis or part are non easy estimated. The grounds available from the experience of metropoliss that have hosted the Olympics over recent decennaries suggests that the positive claims derived from hosting the event, frequently made during the command competition itself, may be exaggerated. ” ( Poynter, 2006 )
Chapter IV
Analysis
The extended survey carried out for the intent of replying the chief inquiries that were formulated in the Chapter I of the undertaking provided the solid foundation for the analysis of all current tendencies and licenses to do the hereafter intelligent anticipations. Olympic Games act upon the country of east London in figure of ways, supplying impacts and alterations of different length and deepness. Therefore, the below stuff divided in such a manner that highlights the power significance of the impacts, get downing from the strongest to less important hit on the belongings market in London. The analysis will show the current belongings tendencies and compare them against the statistics available in the twelvemonth 2005 when the determination on the Olympic command was announced and the expected belongings values of the station Olympic period.
Transformation of east London from all activities that are presently carried out in the country – regeneration with its substructure and conveyance betterments, upgrading in instruction installations, increased employment – expect to see an tremendous demographic alteration in the hereafter. Furthermore, the investing in the country and an tremendous engagement of east London governments with enormous aid from the populace will probably to give great recovery of a socio-economic clime.
4.1 Impact
4.1.1 Economic Impacts
At the current economic downswing the media, at national and international degree, discusses the possible impact of hosting the 2012 London Olympic Games. The ground for this is an intensified force per unit area on authorities disbursement and occupations. First of all it is of import to set up what economic impact, in the competition of this research paper, truly is. It is a step generated by capital costs such as disbursement on, for illustration, substructure ascents, runing costs – policing and broadcast medium, plus tourers disbursement, or an inward investing and trade. ( Halper, 2009 ) Gross from related sporting and cultural events brought to the metropolis has positive economic effects. These include: the media, selling activities, jocks, functionaries, witnesss and visitants. Furthermore, the increased investing in athletics substructure, such as adjustment and conveyance, is expected during the runup to the Games, therefore conveying economic benefits. The promotion brought by keeping the Games besides attracts sponsorship investings.
PWC has conducted OGIS to measure the net benefits that would originate from hosting the Olympics in London. It concluded that London ‘s GDP would increase by 5.9 billion Pounds between 2005 and 2016 ( mention to postpone below ) . Increase of 0.5 billion Pounds was estimated in the five boroughs around the Olympics site: Greenwich, Hackney, Newham, Tower Hamlets and Waltham Forest and 1.9 billion Pounds for the UK as a whole.
Table: Summary of expected economic impact ( alteration in GDP, million Pounds ) , PWC 2005
Spatial degree
Pre-event
( 2005-2011 )
During event
( 2012 )
Bequest
( 2013-2016 )
Overall
( 2005-2016 )
North East London
464
31
31
525
As a % of the London alteration in GDP
13.8 %
3.4 %
0.01 %
8.9 %
“ The largest economic impact in GDP footings would happen in London during the pre-Games building period whereas, for the UK as a whole, the impact on GDP would be greatest over the period of the Olympics at a flat 1.067 billion Pounds. There is an 84.4 per cent opportunity that the Olympics will hold a positive impact on UK GDP over the period 2005-2016: in London the comparable chance is 95.3 per cent. However there is a 10 per cent opportunity that the UK will lose 517 million Pounds. The survey by the University of Nottingham suggests that for the UK as a whole and for London between 11 and 12 per cent of the consequence on GDP is attributable to expenditure on substructure. ” ( Matthewman, Kamel, Bearne, 2009 ) Some other surveies done by Dr Blake ( 2005 ) , Brunet ‘s ( 2005 ) survey of the 1992 Barcelona Olympics and InterVistas Consulting survey of the 2010 Winter Olympics – all support the position that Olympics convey positive impact for the economic system of the host state.
Surveies of the impact of old Olympic gamess have indicated that inward investing has been attracted by readyings for the Olympics. All the impacts nevertheless depend upon the size and adulthood of the belongings market of the host metropolis. Smaller and less mature markets, experience a greater impact of the Games. The ground being is that smaller metropoliss use Games to establish themselves onto the international sphere. London, nevertheless, already has its world-wide presence and is an constituted metropolis that has been a premier finish for inward investing for decennaries, therefore might be assumed that it does non necessitate any farther publicity to pull new entrants. This point nevertheless, should be argued. With increased competition from other established and emerging metropoliss London concern stable place could be exposed to hazards. Olympics, on the other manus, might assist to advance consciousness of London as a concern finish.
Furthermore, London is visited widely by tourers and has an vastly rich and sophisticated belongings market and foreign investors are familiar with the market and necessitate no debut. Therefore, the major chance from Olympics for London is in the influences on the urban development through investing in substructure and environmental betterments. This will non merely find the success of the Games themselves, but besides the grade of long term benefit of East London country and its belongings market, in peculiar. The survey “ Reaching Beyond the Gold ” that covers Seoul, Barcelona, Atlanta and Sydney Games supports this statement. It revealed that keeping the Olympics helped to regenerate run down urban countries through the design and location of the Olympic Villages. ( Jones Lang LaSalle IP Inc. , 2010 ) This is the purpose of London Olympics 2012, but the graduated table of the undertaking is much bigger, in fact, the biggest regeneration undertaking of all time held in Europe. Muzon ( 2010 ) concludes that the gross generated by the Olympics tends to transcend the direct costs of hosting the Games, nevertheless the extent of any such positive net impact will to a great extent dependent upon the degree of betterments required and the manner disbursement is treated within the fiscal assessment.
That said, non all positions are positive. There are a figure of beginnings that suggest a possible negative economic impact – a survey by the European Tour Operators Association, which found that hosting the Olympics did non hold a positive consequence, for illustration, on touristry in either Greece or Sydney, in fact it had the opposite consequence. ( The Financial Times, 2009 ) The doubting economic experts see Olympics conveying merely few touchable benefits, comparing to the significant readying costs it drain from the state ‘s economic system. Royal Geographical Society published the followers: “ the 2012 Games will hold a negative impact in the undermentioned ways: The cost to the wider community: The costs of the Games ( such as through revenue enhancement support, security and eventuality support ) have resulted in the Games bing 9.3 billion Pounds, good above the original budget. An extra 675 million Pounds support has been allocated through lottery support. This has resulted in other ‘good causes ‘ that are besides supported by the lottery, having lower degrees of support in the tally up to the 2012 Games. ” ( Royal Geographical Society, 2010 ) Further the publication demonstrates the negative attitude of concerns local to east London: “ in a study undertaken by the Thames Gateway Forum, a figure of respondents 26 per cent replied that the Olympics would non be good for their administration. Around 9 per cent of the 212 concerns, which are required to travel off by the terminal of the twelvemonth, have yet to hold an ‘exit scheme ‘ in portion because they can non afford the cost of resettlement. ” General Manager of Tyrone Textiles Ltd. , T. Mayes, made the similar statement: “ Hosting the Olympics is great intelligence for the state but for us, as a concern, it presented a existent challenge ” . ( Mayes, 2010 ) The company went through the mandatory purchase of its Stratford installation by the LDA to enable the building of the Olympic Park.
Despite the negativeness, a assortment of trade theoretical accounts clears that hosting a mega event like the Olympics encourages national exports and, amongst other benefits, boosts the trade by up to 30 per cent higher in the states that hosted the Olympics. ( Rose, Spiegel, 2009 )
