When it comes to sporting events, it doesn’t get much bigger than the Olympics. With years of planning and preparation, millions (and even billions) of dollars are spent on building new infrastructure, as well as on promoting the host city on a global scale. This year’s summer Olympics have placed the spotlight on Rio de Janeiro, Brazil, and the games are now underway. The globe is not only watching the games, but everything happening within the country before, during, and even after the big event.
The Proctor team has been examining the real estate market in Rio and how it has been affected by one of the world’s most coveted athletic shows. Here’s what we’ve discovered:
A Reason for Concern
The Olympic athlete’s village in Rio is a massive project undertaken by the country, and it’s noted as being the largest athlete’s village in Olympic history. Brazil developed the anticipated new neighbourhood for the games at a cost of USD $880 million. With sustainability in mind, the plan was to sell the property as luxury style apartments after the games ended, but with fewer than 10 per cent of the homes currently sold, concerns are being raised that the Olympic village may turn into an abandoned site.
Home Sales Slow Down
Experts have attributed the lower than expected home sales to Brazil’s current economic state. When the Olympic village was initially planned, Brazil’s economy was doing very well, but now the country is in one of its worst economic recessions since the 1930s. Corruption surrounding the government and those involved with the development of the infrastructure for the games has lead to political uncertainty and unrest in the country. The result isn’t just affecting the new Olympic developments in Rio; it’s affecting the entire country.
Effects Across Rio and Beyond
Outside of the Olympic village, the real estate market has been gradually cooling-off leading up to the games. There was an initial burst of excitement when the Olympics were first awarded to Rio, which was reflected in a strengthening of the real estate market. In recent years, prices of homes have been gradually declining, making for a buyer's’ market that is ideal for those who are looking for long-term investment opportunities. International investors, including those from Canada, are at an advantage with added buying power from their global currencies. However, for those who are at home in Brazil, the effect of the weakened economy does not make the market as appealing.
Brazil and the Olympic games may seem like they are a world away, but our team at Proctor likes to keep a close eye on real estate markets around the world to gain a thorough understanding of trends that may one day lend insight into our market here in Edmonton.Ready to start house hunting? You can search real estate listings now, refer to our Buyers' Guide for helpful tools and buying advice, or start working with an agent right away - please contact us at (780) 709-0811.