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The hosting of the Olympic Games may have some impact on residential real estate prices, but our analysis of four North American experiences suggests that the impact, if any, is likely to be experienced over a fairly long time frame during the lead up to the Games and does not persist after the Games are done and gone. The impact may depend on the size of the local property market – presumably the smaller the market, the more noticeable the impact – but, neither Calgary (population 657,000 in 1988) nor Salt Lake City (population 182,000 in 2002) experienced a material Olympic effect.

The effect may be less pronounced for a larger urban centre such as Vancouver (population 2,361,8331 anticipated for 2010) and a luxury resort like Whistler, particularly since Vancouver is already the country’s least affordable real estate market and Whistler is already a world-renown destination resort (with the associated high-priced real estate). Added to this is the fact that Vancouver was arguably already in the midst of one of the strongest real estate booms ever. Annual homeownership costs amounted to 79% of household disposable income in Vancouver at the end of 20072, almost double the average among Canada’s major cities.

When all is said and done, the impact of the 2010 Olympics will likely be both indirect and direct through increased international exposure for the Province of B.C., Vancouver and Whistler as well as the construction of permanent facilities and improvements to infrastructure including the significant upgrades to the Sea-to-Sky Highway and various sporting facilities. However, our research indicates that those hoping for an Olympic effect to provide a sustained boost to an already heated residential real estate markets may be in for a disappointment. 1 Source: BC Government Statistics – data for Greater Vancouver only. 2 RBC Economics Housing Affordability Report March 2008.

The complete article courtesy of Phillips Hager and North can be found at the link below:

This article is for information purposes only. All performance data represents past performance and is not indicative of future performance. It is recommended that individuals consult with their Wealth Advisor before acting on any information contained in this article. ScotiaMcLeod does not offer tax advice, but working with our team of experts we are able to provide a suite of financial services for clients. The opinions stated are not necessarily those of Scotia Capital Inc. or The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF.

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